Australian retail REITs still strong
Major Australian real estate investment trusts (REITs) that hold retail exposure are well positioned to withstand pressure even after a number of national retailers recently entered administrations, Fitch Ratings believes.
Although this followed an extended period of subdued consumer confidence and retail spending, Aussie retail REITs were still relatively safe as retailers in Australia and would continue to seek better terms and rent reduction as part of negotiations on renewals or new leases following the spate of high-profile store closures.
According to Fitch, this may affect leasing spreads, which weakened over the past couple of years.
“Most of the announced store closures, nearing 200 in total, are in shopping malls across Australia, and will result in an increase in vacancies, including in centres owned by major REITs such as Scentre, Mirvac, Vicinity Limited (not rated) and Stockland Corporation Limited (not rated),” the agency said.
“We still believe that changing consumer preferences will drive the REITs to continue to partner tenants to maintain their leading positions in Australian retail.
“In particular, the REITs will need to keep adding value to tenants by providing a mix of stores, operators and experiences that will drive consumer footfall into the centres, and sharing information with retailers to help them tailor their offerings to the evolving consumer preferences.”
AUTHOR
Oksana Patron
Recommended for you
With BlackRock recently combining both private and public markets in a single managed account for US investors, commentators explore the challenges and opportunities of doing so in Australia.
PM Capital has hit out at Platinum Asset Management, saying the firm only provided “limited engagement” following its bid for two listed investment companies.
Platinum Asset Management has seen outflows moderate during March, down 15 per cent from the previous month when it announced two major investment team changes.
Two listing experts have shared tips for fund managers to consider when it comes to launching their first ETF on an exchange.
