Australia wide, the level of Retail construction was up by some 17% for the 12-month period to June 2007.
In the main, this involved extensions to existing suburban Shopping Centres; plus some new construction in many of the growth corridors.
With continued inner-city residential population growth, CBD Retail rentals have shown strong growth. But with new bulky goods construction underway, you’ll see some yields start to soften.
Most activity for Victoria has been with Westfield in Doncaster and Geelong. Although the Myer upgrade (in the Bourke Street Mall) is also a major part of this building activity. Furthermore, strong retail sales should result in improved turnover figures for the year.
Likewise, Queensland and Western Australia are both buoyant — recording the strongest growth in sales and rental rates — in some cases, up by 25% on last years.
Do be mindful though … the Retail sector (like the Residential) is also very sensitive to any increases in interest rates.
