“These positive numbers were also reflected across the Colliers retail management portfolio here in Australia. In May, retail sales had a massive 16.9 per cent rebound and together with the preliminary June numbers meant that the level of sales were now 7 per cent above pre-virus data,” Mr Bate said.
“The big category winners continued to be supermarkets and takeaway food services, which included cafes and restaurants. This was supported with lockdown laws being relaxed further at the end of May and throughout June as more and more people emerged from the virus hibernation.”
Australian Unity has seen this rise in demand and is committing $85 million in further development works across its neighbourhood shopping centre portfolio in the coming months. One is at its Blackburn Centre in Melbourne’s east.
Through its Diversified Property Fund, Australian Unity owns supermarket-anchored neighbourhood shopping centres in Victoria and Western Australia with 72 per cent of its retail portfolios income coming from essential services and supermarkets.
Fund manager Nikki Panagopoulos said she has witnessed only nominal income disruption to the Fund’s distributable income, across the portfolio, which stems from requests for rent relief from businesses adversely affected by government measures in response to COVID-19.
“Footfall in neighbourhood and sub-regional assets has not deteriorated as much as destination assets,” Ms Panagopoulos said.
The fund’s portfolio was re-valued during April and May. This resulted in a 2 per cent increase on prior independent valuations for 80 per cent of the overall portfolio.
Jacob Swan, JLL’s joint head of retail investments (Australia), said investors and landlords have seen a steady rise in interest in food-anchored assets since the pandemic took hold.
“Anecdotally, some neighbourhood and sub-regional shopping centre portfolios collected up to 85 per ent of rent over April and May, which was a very positive outcome. Some of the outstanding rent will be collected by deferral and remaining portion will be waived under the code,” Mr Swan said.
“Importantly, the foot-traffic rebound in these centres has been fast and effective, as workers remain at home in the suburbs frequenting their local neighbourhood or sub-regional centre as opposed to the major CBD and regional centres.”
JLL’s joint head of retail investments (Australia) Sam Hatcher added that many food and beverage retailers managed to adapt quickly to the new operating environment with many “pivoting their business models to cater for greater online deliveries and takeaway”.
Carolyn Cummins is Commercial Property Editor for The Sydney Morning Herald.