Retail property values across the country’s largest malls could fall by as much as 30 per cent as a growing proportion of retail sales shift online, according to property advisory group PAR.
The analysis, by PAR, of 31 of the country’s largest shopping centres is based on an assumption that as much as 20 per cent of their tenants’ current sales will swing into the online retail. The group noted that the rise of platforms such as Amazon, Uber Eats and Catch and quicker supply chains set up by Australia Post and others, was likely to result in e-commerce approaching 20 per cent of total retail sales within five years, they said.
Recently they noted hefty writedowns by major malls owners such as Westfield and Vicinity, whose writedowns were driven by the disruption to physical shopping by the pandemic lockdowns, which hit rent collection initially.
But even before the deadly virus spread globally, British investment manager Fidelity had issued a very bearish prediction of British retail real estate assets, a shake-out that it said could play out in the Australian real estate sector as well.