Retail Returns to Favour

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Retail property has had some press coverage of late.

It has shown a surprising improvement, given global events and the hike in interest rates.

Westfield (a good retail barometer) reported a strong mid-year result from its Australian shopping centres.

RetailMar2010As you can see from the table, Vacancy rates have fallen significantly and Yields firmed — particularly within the strip shopping centres of Melbourne.

And furthermore, rentals have also started to climb … as the economic recovery has given shoppers confidence to start spending again.

Currently yields ranging between 4% and 6.5% across these various strip centres. And would indicate that investors are returning to retail property once more.

If you are planning to acquire some Retail property, you need …

    1. A strong tenant (well-established, or proven backing);
    2. A long lease (5 years+); and also
    3. Solid rental reviews (CPI or at least 3.75% pa).

With these in place, you should be able enjoy a good long-term investment.

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