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News release


JLL Retail Survey:  On balance, Retail Centre Managers’ becoming more positive about future trading prospects, but retailing challenges remain

Food retailing remains a consistent retail performer, while clothing, footwear and personal accessories have consistently under-performed the overall retail market over the past 3 years

AUSTRALIA, 28 AUGUST 2013 - Jones Lang LaSalle’s latest Retail Centre Managers’ Survey for August found the highest levels of sentiment recorded since May 2012, but the market remains challenging, with tenant enquiry levels still weak in most sectors.
There was a modest improvement in the sentiment of Centre Managers’ reported in the August 2013 survey, with 56% of respondents expecting some growth in sales turnover over the next 12 months, compared with 48% in the May 2013 survey. 
Jones Lang LaSalle’s Australian Head of Property and Asset Management, Richard Fennell said, “On balance, Centre Managers’ are becoming more positive about future trading prospects, but retailing challenges remain.
“One of the key issues highlighted in the August Survey was that the market for food and convenience goods retailers is still reasonably buoyant.  Busy lifestyles continue to support coffee shops, cafes and take-away food.
“The major retailers, particularly supermarkets, have continued to see steady growth.
“Food retailing has been a very consistent performer, outperforming the overall retail market for an extended period of time.
“Services remain an area of potential growth for centres.  Mobile phone outlets are still strong and there has been interest from optometrists and other medical services, financial services, hairdressing and other personal services.
“The importance of clear, consistent marketing plans and sales strategies was highlighted by Centre Managers’.
“The depreciation of the Australian dollar was also welcomed, with an expectation that it will diminish the price advantage of pure online retailers and increase tourism based retailing,” said Mr Fennell.
Food retailing, including food catering (cafes, restaurants, take-away) continued to outperform the total retail market.
Tenant enquiry in the fashion sector mirrors national retail trade data, with clothing, footwear and accessories trade consistently under-performing the overall retail market throughout the last three years. (see Figure 2 below)

Jones Lang LaSalle’s Director, Research and Consulting Australia, David Snoswell said, “After reporting a positive turnaround in enquiry in the December 2012 quarter, the last two surveys have been quite weak.  The net balance in tenant enquiry moved from +2.1% in December 2012 to -14.9% in March 2013 and -12% in June 2013.
“This is consistent with anecdotal and empirical evidence of the broader retail leasing market, which suggests tenant demand is stable but still at very subdued levels.
“The economic outlook remains the main concern of centre managers, with 51% of respondents to the survey expressing negativity regarding the year ahead, in line with the last survey in May.
“However, there are more respondents positive about the political environment in the lead up to the September election.
“And on the bright side, recent consumer sentiment data suggests that retail spending may improve in late 2013.
“The Westpac-Melbourne Institute Index of Consumer Sentiment reached 105.7 in August following the Reserve Bank of Australia’s latest cut to the cash rate,” said Mr Snoswell.
Mr Fennell said a positive to come out of the August Survey was that only 4 of the 28 neighbourhood centres and two of 15 sub-regional centres included in the sample reported a decline in turnover for the year to June 2013.
“Annual sales turnover in the neighbourhood centre portfolio increased by 6%, buoyed by solid sales figures from the supermarket anchors.  This compares with 3.6% reported in the previous year.
“As with previous surveys, WA-based centres continue to outperform the market, with 4 of the top 6 centres in terms of sales growth being located in the Perth metropolitan area.  The introduction of Sunday trading a year ago has positively impacted on sales over the past year,” said Mr Fennell.​