High street ‘foodies’ the big winners in Perth
FOOD retailing in Perth is outperforming all other trade markets in Western Australia, with the investment appetite for ‘foodie’ high streets achieving solid results, according to new research by Ray White Commercial.
Brett Wilkins, property adviser at Ray White Commercial WA and Ray White Commercial head of research Vanessa Rader have just compared five prime speciality retail streets in Perth and found very low vacancy rates despite limited retail trade across WA.
“Overall the Perth retail property market is performing well despite the overall uncertainty across the Western Australian economy,” Ms Rader said in the report Between the Lines, Perth High Street Retail Strips, July 2017.
Mr Wilkins said that during this time of low interest rates there were many investors, most notably on the East Coast, looking for a secure property holding with sound returns, which has impacted yields downward.
“Oxford St, Leederville has been the standout performer as this cafe hub is a hive of activity resulting in all 46 shops in this strip fully occupied.” Mr Wilkins said.
“Rokeby Road, Subiaco – also a strong food related location – only features nine vacancies totalling approximately 772sq m or 5.94 per cent; while in the fashion strip of Napoleon Street Cottesloe the vacancy rate of 6.81 per cent has been recorded with this location seeing greater turnover in tenancies in more recent times.
“Beaufort Street in Mount Lawley/ Highgate has the highest volume of vacancies with over 1,500sq m of vacant stock, however given the size of this strip represents just 9.01 per cent which is behind Bay View Terrace in Claremont which records 922sq m albeit represents 10.16 per cent of the total lettable area.”
Mr Wilkins said the outlook for the Perth retail market was for modest improvement “tied to pickup in the local economy and population growth”.
“Strip shops have all performed a lot better recently having come off a few bad years with the slump in the economy,” he said.
“In a good sign, there’s been two property sales by me in the last six months which were both characterised by strong prices and excellent bidding. There were 10-12 Bay View Terrace Claremont, which sold for $4.8 million and 36 Napoleon Street, Cottesloe, which sold for $2.06 million.
Mr Wilkins noted how tightly held investments in these five prime strips were with very few selling. In fact in the last 12 months there has only been six sales in the researched strips.
“Even Bay View Terrace with a vacancy of 10 per cent is in far better condition than in recent years.”