The divestment of non-core retail assets by some of Australia’s biggest players in 2018 has created a billion-dollar market, with retail sales experiencing the second strongest year on record.
A huge $9.21 billion of retail assets was transacted last year, according to the latest research from Savills Australia.
Sub-regional and regional centres transacted at the highest rates, accounting for almost half of all investment.
While transactions on the east coast accounted for more than 90 per cent of total sales.
Stockland commercial director Louise Mason said on Wednesday that the property giant is on track to achieve its target of $600 million of non-core retail divestments in order to target re-weighting into office and logistics.
Shopping mall giant Vicinity is in the midst of offloading up to $1 billion of sub-regional and neighbourhood centres.
Vicinity said that sale proceeds from its non-core portfolio will be reinvested in its “flagship development opportunities”.
Vicinity’s portfolio includes Melbourne’s Chadstone Shopping Mall, the Queen Victoria Building and the DFO outlet centre portfolio.
Despite market headwinds, Savills research and consultancy director Shrabastee Mallik remained positive about the retail sector into 2019.
“Retail spending is forecast between 2.5 per cent and 3.0 per cent through the course of 2018, albeit skewed to less discretionary retail spending.
“Although consumers have curbed their spending on discretionary products in the past two years, forward-looking indicators bode well for the retail sector this year.”