Retail centre managers optimistic about 2015

Retail centre managers optimistic about 2015According to JLL’s latest ‘Retail Centre Managers’ Survey’, sentiment has improved among centre managers for the first time since 2011, with nearly two-thirds expecting modestly higher turnover in 2015 despite challenging conditions.The past few years have been tough for Australia’s retail sector, yet overall sentiment among JLL’s retail shopping centre managers is up, with 63 per cent of centre managers surveyed by JLL in February 2015 expecting at least some turnover growth in the year ahead.This is the strongest positive sentiment recorded over the dozen such surveys conducted since September 2011, said Richard Fennell, JLL’s head of Property and Asset Management – Australia.”Centre managers across JLL’s managed retail portfolio are more positive about the trading prospects of the centres they manage compared to six months ago,” he noted. “Growth expectation is up from 56 per cent in August last year and 51 per cent in February 2014. And, importantly, just 11 per cent of respondents considered that sales turnover would decline over the next 12 months.”JLL’s latest survey coincided with the Reserve Bank of Australia’s announcement of a drop in the official cash rate to its lowest level in Australia’s history. Consumer sentiment rose after the historic cut, noted Fennell. Lower fuel prices and share market gains also contributed to the positive sentiment.”These three factors have potentially significant benefits for the retail sector by increasing wealth and [consumers’] level of disposable income,” he said.A total of 118 retail centres across the five mainland states and the ACT participated in the survey. David Snoswell, JLL’s director of Strategic Consulting – Australia, said the strongest-performing centres were geographically dispersed, “reflecting a strong local trade environment rather than recent trends in trading conditions at the state level”.Centres in WA continue to lag regarding the outlook for turnover growth, in contrast to 2013 when WA-based centre managers were the most optimistic. “The resources boom is certainly over and this has negatively impacted on the retail market,” Snoswell said.Although about half the managers surveyed indicated no rise in tenant enquiries in the past six months, a net balance of 15 per cent reported stronger levels of enquiry – the highest among the 12 surveys.In the past year, managers reported increased tenant enquiry across all retail categories, “a positive sign for managers looking to improve the retail mix in their centres”, said Fennell. “A sustained increase in tenant enquiry levels is usually a precursor to growth in retail rents.” Food retailers – both catering and speciality – remained the main source. To read the report click here