The 2007 Property Council/Lease Equity Retail Development Survey has shown that GLA for retail developments will soar by 210,000 square metres by the year 2011. This incorporates Shopping Centres either being redeveloped or developed in this time.
Development of retail space is being fuelled by the substantial growth in population and expansion of national retailers business into Western Australia, largely as a result of the resources boom.
The growth in Shopping Centres is the equivalent of three times the size of the Carousel Shopping Centre, and is clustered around growth corridors of Mandurah and Joondalup.
For the first time in many years, we are witnessing a large amount of new centres entering into the market, with 12 currently being mooted. This is a result of low yields currently being sought after for the purchase of existing centres. Stockland have been aggressive, with the construction of Stockland Baldivis, and Stockland Fremantle. Whilst further east, Brookdale Plaza is set to become an exciting development, adding 10,000m2 of GLA to the Armadale region.
Lease Equity are involved in almost one third of the 37 Shopping Centres that will be either developed or redeveloped in the forthcoming 36 months. Estimated construction costs of these developments top $1.4 Billion.
“Our research indicates that the growth in retail spending as a result of the population expansion is consistent with the new gross lettable area being developed.“ said Michael Richardson, Lease Equity’s Retail Property Analyst.
Lease Equity Associate Director, Adam Musbah added, “Development has been driven by the economy but also opportunity in developing areas. Furthermore, the proposed developments incorporate 18 majors and equate to over $450 Million in increased turnover per annum from those tenants.”
Development is concentrated in those areas that are experiencing the most residential growth, and increase in infrastructure such as the Southern railway link. The CBD has the added dimension of having an increased working population, estimated by Lease Equity to grow by over 25,000 people by the year 2012.
The City will see an additional 30,000 square metres of retail stock added with Century City being the largest addition of approximately 13,000 square metres of retail space.
Whilst not specifically contemplated within the survey, Lease Equity confirmed that many of the Shopping Centres within their portfolio that were being developed had a greater proportion of national tenants than previously experienced, again highlighting the focus on Western Australia’s booming economy.