Retail rents in Perth’s Hay and Murray Street Malls, already among the top 40 on a global scale, are set to leap by up to 100 per cent in the next 12 months.
And the soaring rents, now $5000/ sqm in some spots, are likely to change the face of the malls as more national and international tenants move in to fill the gaps created by retailers unable to fork out the massive increases they face as their rent reviews come up.
There is also no solace in the cost of outgoings, which rose more than 30 per cent in the 12 months to December.
Jim Tsagalis, managing director of Lease Equity, which manages up to 92 per cent of the retail rentals in the two malls, said many retailers whose leases were due to expire were coming off a low rate per square metre, which accounted for the huge rises they faced.
“On the Murray Street mall we have done a number that will see rents more than double and on the Hay Street mall it is the same,” he said. “We are expecting they will be official in so far as the tenant will have opened and traded by the end of this year or early next year.”
Mr Tsagalis said the bar had been raised by the new retail centres being built in the CBD, including Century City, which was due to open by the end of the year, and the new retailers flocking to Forrest Chase.
“We have done a number of deals that are going to see not only the mix but the type of tenants change quite drastically,” he said.
Despite the rising rents, many retailers were renewing their leases.
“They have all spent a lot of money on their shops to keep up with the changing face as well,” he said. “There is unprecedented investment in the CBD.”