LIKE Perth's CBD, the suburban shopping centre landscape has been defined in 2009 by an abundance of new retail space becoming available to the market.
LIKE Perth’s CBD, the suburban shopping centre landscape has been defined in 2009 by an abundance of new retail space becoming available to the market.
Completed shopping centre constructions or refurbishments in the past year included ING’s Lakeside Joondalup, Colonial First State’s Rockingham City, Hawaiian and Brookfield Multiplex’s joint venture Claremont Quarter, and stage one of Wanneroo Central.
New centres under construction are Stage two of both the Claremont Quarter and the Waterford Plaza, Stockland Riverton and The Springs shopping centre in Beechboro, while approvals are in place for an expansion of The Shops at Ellenbrook, Stage two of both Cockburn Gateway and Wanneroo Central, and for a retail precinct to be established at Victoria Quay in Fremantle.
The Property Council of Australia estimates the new centres and refurbishments to be completed by 2012.
Cockburn Gateway and Belmont Forum owner, Perron Group chief executive Ian Armstrong, said from a patronage point of view, shopping centre performance had been good in the past year, but the economic crisis meant leasing had become difficult.
“From a patronage viewpoint you wouldn’t know that we’ve been stuck in a recession,” Mr Armstrong told WA Business News.
“What’s difficult is some weak retailers either have gone out of businesses or not renewed leases, and getting businesses to expand and open new shops is not easy.
“To lease a new shop and to fit it out could cost you from $100,000 to, for a restaurant it could cost you $750,000, and those costs are normally financed.
“That sort of finance has been very, very difficult for people to get, so people that didn’t have other ways of borrowing the money, equity that they could use, are finding it very difficult to find the funds to expand their business.
“There might be the trading opportunity, but to get there is not easy. Leasing has been really difficult.”
Despite the apparent improved economic confidence, Mr Armstrong said he expected difficult leasing conditions would continue.
“I think what’s going to happen is the patronage is still going to be good because I think we’re getting more optimism,” he said.
“I think confidence is going to steadily improve and people are going to be shopping, but I don’t think that the credit crisis is going to unravel as quickly.
“We’re still going to have the same problem in that it’s going to be difficult for people to get the finance they need to open new businesses.
“Some of the big chains are still expanding quite aggressively, I guess that they have other sources of finance and cash flows to finance these new store openings.
“But for a small chain ... with a good opportunity to open in a good traffic location, in a good shopping centre, you’ve still got to find a couple hundred grand to fit it out, and it’s not easy to get.”
Even with the leasing setbacks, Mr Armstrong said retail rents had been a bit of a mixed bag, dependent on the location of the shopping centre and its development stage, but increased incomes were still being recorded.
“It’s very hard to say where the trend is ... but generally we are seeing growth in rents.”
