APPD Market Report Article
Melbourne
May 26, 2024Andrew Quillfeldt, Head of Capital Markets Research, Australia
0.6%
AUD 1,507
Rents
Stable
All sub-sector rents are steady
- Rolling annual retail trade growth to February 2024 was recorded at 2.7%, above the national average of 2.4%.
- There has been a decline in shopping centre space enquiries in 1Q24. Interestingly, leasing demand from aesthetic clinic operators is strong in suburban locations.
Chadstone Homemaker Centre’s redevelopment reaches completion
- No supply additions were recorded in the quarter.
- Chadstone Homemaker Centre’s redevelopment of its former Harvey Norman tenancy reached completion with the addition of Coles Supermarket, Liquorland and more tenancies.
Most significant year-on-year softening in regional and LFR yields
- Three neighbourhood, one sub-regional and one freestanding retail asset transacted, totalling AUD 129.9 million.
- All sub-sector yields decompressed year-on-year except for the median sub-regional yield, which was stable.
Outlook: We are likely near the end of the yield-decompression cycle
- Project feasibility is likely to remain challenging, resulting in a weak supply pipeline.
- Discretionary spending is likely to remain subdued as the RBA’s cash rate increases continue flowing through the economy.
