RETAILERS FORESEE DISPERSED DEMAND
With the number of people settling across the Gold Coast expected to rise dramatically, retailers are betting on neighbourhood shopping centres
WHILE attention has naturally focused on the Gold Coast’s heavyhitting retail centres, such as Pacific Fair and Robina Town Centre, the real growth story lies outside of the mega malls, according to Herron Todd White.
Neighbourhood shopping assets are seeing substantial growth as major retailers, such as supermarket giants Coles and Woolworths, seek to expand into the Gold Coast’s population boom area.
“In a classic case of the chicken before the egg, Coles and Woolworths have been aggressively securing sites within the region to ensure they can capture a piece of the market share over the coming decades as population growth booms in the region,” the property valuation firm writes in its Month In Review report for July.
The report’s authors give Coles Pacific Pines as an example of the growing supply, and demand, for neighbourhood shopping centres.
The supermarket sold for $30.025 million last year.
“It was presented to the market for sale with a brand new 15-year triplenet lease in place.
“The property achieved one of the lowest initial yields seen on the Gold Coast, for an asset of this size, at 4.63 per cent.”
They note that, despite the massive investment Pacific Fair and Robina Town Centre have made in their new dining precincts, there was still a large number of people who preferred to avoid major shopping centres.
“Many investors who own standalone retail buildings have been capitalising on this in recent years.
“Of particular note is Palm Beach which has witnessed a massive boom in the number of restaurants, cafes and bars over the past few years.
“In 2018 alone, there have been 12 new town planning applications for cafes within the suburb.”
The report’s authors note that, from a valuation perspective, they see rents as the biggest risk to the retail sector.
“With such an influx of retail accommodation across the Gold Coast and only so many consumer dollars on offer, there will unfortunately be some retailers that will not see it through,” they write.
“The supply and demand metric at any given time will ultimately dictate the strength or otherwise of the retail leasing market, however, our projection is that rental growth in most areas will be stagnant at best.”