Australian retail sector sees rosy glow

By Greg Bell

When you're investigating commercial property options in Surfers Paradise, it can be easy to get tied up in office yields and vacancies – but why not take a look at the retail sector as a potential area of growth? This exciting and bustling area offers some top class shopping strips and centres for not only foreign tourists, locals and interstate visitors, but for commercial property investors as well.

M3property has released its shopping centre report for 2015, which uncovers some potential trends and forecasts for the retail property sector in Australia over the next year. The report gives an overview of how retail assets are expected to perform over the next year or so, based off a number of key points. It examined retailer and investment activity across Australia, focussing on regional, subregional and neighbourhood shopping centres.

The investment portion of the retail market is looking strong, according to the research. It indicates that offshore investors are likely to keep the wheels turning for a positive year ahead, despite also predicting generally mixed conditions overall. This could open up some great avenues for commercial property investment in Surfers Paradise, so here are a couple of revelations from the report to whet your appetite. 

Retail activity rising 

One of the factors that bolsters turnover and performance for retail properties is the level of consumer spending. The Australian Bureau of Statistics (ABS) shed some light on this in its most recent retail trade figures for January this year. The data revealed that Queenslanders opened their wallets wide in January, with retail trade rising 1.2 per cent. Australia-wide the figures rose 0.4 per cent over the month in seasonally adjusted terms. This was off the back of another 0.2 per cent rise in December 2014, which could signal that retail activity across the country remains solid – a good sign for commercial investors considering retail assets in Surfers Paradise.

The report notes that improving activity might mean investors hold onto their shopping centre assets a bit longer – this could result in lower sales figures, but it could be just another indicator that the sector is doing well. 

Commercial property in a good light 

It highlighted a number of factors that influenced tenant demand over 2014, finding that most indicators saw improvements. While it was a slow year for Australia's economy in 2014,  the report serves as a sound reminder that there are couple of other aspects that can offset marginal economic development. 

Among other things, consumer confidence, structural changes in the retail industry, policy and construction each have a role to play in supporting retail property. Population increases can also have an impact, which is potentially good news for commercial investors in Surfers Paradise. Queensland had the third highest population boom in the country to the June quarter last year, m3property found, and this can offset some disappointing results in other areas of the economy. 

Whatever category of commercial property you choose to buy into, it's worth keeping these factors in mind. They aren't the be all and end all, but they are certainly an influencer in how the market behaves.

The report points to a positive future for shopping centres. Investment activity stayed solid over the year, boosted by the availability of low-cost capital and finance. This will likely continue to propel investors towards shopping centres over the next 12 months – and it's a good thing too, as it could drive construction and development work. More floor space is expected over 2015, which could do wonders for offsetting strong demand.

Whether you're interested in the retail sector or just feeling out the options for retail property investment in Surfers Paradise, why not get in touch with the professionals at Ray White Surfers Paradise for handy tips and advice for your search. 

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