New research from Jones Lang LaSalle shows fewer retail centre managers expect retail sales growth over the next year, and feel cash rate cuts haven’t boosted confidence, online retailing is increasingly a threat and tenancy mixes need re-evaluating.
Jones Lang LaSalle’s survey of centre managers finds that sentiment has weakened, with fewer managers expecting retail sales growth over the next year, compared to expectations three months ago.
David Snoswell, JLL research and consulting director Australia, says cuts to the official cash rate in May and June have had limited impact on tenant enquiry levels or consumers.
“[cuts to the official cash rate were] expected to provide a boost to consumer confidence and retail spending, which should translate to improved turnover in the year ahead. Centre managers remain pessimistic about this scenario playing out,” Snoswell says.
In the May 2012 survey, 57 percent of centre managers expected growth in sales over the next 12 months, while in the August 2012 survey this figure dropped to 53 percent.
7 percent of respondents said they were positive about the economy for the year ahead. According to JLL, all but one of these centre managers were based in Western Australia.
Centre managers have also reported greater concern about online retailing over the past three months. In May 2012 26 percent said they view e-tailing in a negative light, in August 2012 this has increased to 39 percent.
Richard Fennell, JLL head of property management Australia, says the key factor expected to improve performance over the next 12 months was changes to tenancy profile.
“This remains a key strategy for centre managers. Those centres that have deliberately changed their tenancy mix, or attracted new tenants with strong customer appeal, have reported solid growth during a challenging trading period,” Fennell says.
View the Jones Lang LaSalle report