Chewing the fat with our Clients provides an invaluable industry snapshot. We recently asked three big players for their views on the retail outlook; state performance and greenfield site essentials. Their responses were insightful as they considered economic conditions and the impact on performance from the mining and manufacturing sectors.
What is your take on retail prospects and the general outlook for 2014?
PB Retail will be tough with this sector still adjusting to the new economy.
JM The retail development pipeline nationally appears strong with plenty of opportunity as majors expand their networks. The challenge though is the specialty retail market needed to support development especially fashion and fresh food tenants.
PM From a development perspective, the outlook is very positive. There is significant demand from institutions and privates for good quality retail property with current low interest rates being a major contributor to this. This is very positive for values.
What particular states and/or regions do you believe will perform well in 2014-2015?
PB WA will perform well, but all states have impacts. WA/QLD mining, VIC reduction in manufacturing etc. Unemployment being a major concern.
JM I believe NSW, WA and QLD will be the leading states for retail development in 2014 & 2015. Victoria has already seen considerable market expansion ahead of the other states.
PM Sydney has been performing very well over the last 12 months and we are now seeing positive signs out of South East Queensland particularly in the residential sector. Melbourne has a question mark over it given the loss of manufacturing jobs. Notwithstanding this, retail property with strong fundamentals in any of the capital cities will do well in the current environment.
What are two crucial items that must be considered when choosing potential greenfield sites?
PB Location, Location, Location. Demographics
JM Growth Corridors. Competition & Majors interest
PM Level of potential interest from the major retailers. Planning overlays.
State Property Manager Vic/Tas Coles
Development Manager, Federation
General Manager, Retail, Australand Property Group