International retailers pushing CBD rents up
International fashion brands are driving CBD retail rents up while domestic retailers are being pushed into secondary location, property group, CBRE reports.
CBRE's head of research, Stephen McNabb, reported super prime net face rents grew by 1.5 per cent in the first quarter of 2015, while primary and secondary rents jumped by two per cent.
McNabb attributed the continued growth of super prime rents to foreign retailers, with 40 international brands entering the Australian market in 2014 — a trend he predicted would continue over the next 12 months.
"With the majority of fast-fashion retailers now having secured CBD space, the next wave of foreign retailers, including the affordable luxury and luxury retailers, will arrive throughout 2015," he said.
"If vacancy rates remain low across most retail asset classes, and demand holds up this year, we expect this will support rental growth and trigger an increase of retail supply, especially CBD centres.
"We believe the tight vacancy rate and rising CBD rents could be the catalyst for unlocking retail supply in CBD premises over the next five years, with DEXUS already flagging the idea of converting some of its ground floor CBD office space into retail."
AUTHOR
Nicholas O'Donoghue
Recommended for you
Policy and advocacy specialist Benjamin Marshan has left the Council of Australian Life Insurers after less than a year, having joined in March from the Financial Planning Association of Australia.
The declining volume of risk advisers meant KPMG has found a rising lapse rate for insurance policies arranged by independent financial advisers, particularly in the TPD and death cover space.
The Life Insurance Code of Practice has transferred from the Financial Services Council to the Council of Australian Life Insurers.
The firm has announced it will no longer be writing new life insurance policies in the retail advised and corporate group insurance channels, citing a declining market and risk adviser numbers.
