In their latest operation update Mirvac announced results for their retail division:
Although retail sales growth has been below long-term averages, the major eastern urban cities are supported by strength in employment markets and a more positive outlook for consumers. Consumer views on family finances over the next 12 months have recorded a notable lift in New South Wales and Queensland over the past six months. Sydney and South-East Queensland are recording tighter unemployment levels than the rest of state averages. With 95 per cent of its retail portfolio in Sydney and the South-East Queensland markets, Mirvac is well positioned in a challenging environment; notwithstanding, retail sales growth is expected to continue to trend below long-term averages.
RETAIL HIGHLIGHTS:
> maintained high occupancy of 99.3 per cent 1 (99.4 per cent at 31 December 2017);
> solid comparable moving annual turnover sales growth of 3.5 per cent and comparable specialty sales growth of 4.5 per cent;
> achieved total sales productivity and comparable specialty sales productivity of more than $10,000 per square metre;
> specialty occupancy costs increased slightly to 15.5 per cent;
> executed 58 leasing deals across approximately 15,700 square metres, with leasing spreads remaining positive. Mirvac has executed 220 lease deals in the retail portfolio in the nine months to 31 March 2018, representing approximately 45,800 square metres;
> Broadway Sydney, NSW received the Shopping Centre News Big Guns’ Award for the highest annual turnover per square metre for the sixth consecutive year; and
> Mirvac’s Shopper Hopper won gold at the NSW Tourism awards for best new tourism business.
The Group’s retail development pipeline also progressed during the quarter, with updates including:
> Rhodes Waterside, Sydney NSW: construction is ahead of schedule, with completion expected in early FY19. The project is 99 per cent pre-leased;
> Kawana Shoppingworld, Sunshine Coast QLD: construction on the 6,900 square metre development continued to progress, which will see the delivery of an Event cinema and an expanded dining precinct. The project is scheduled for completion in mid-FY19; and
> Toombul Shopping Centre, Brisbane QLD: received development approval for the proposed dining and entertainment development during the period. Construction works are expected to commence in the first half of FY19, subject to remaining approvals.
Ms Lloyd-Hurwitz said, “In a challenging and rapidly changing retail environment, our results demonstrate that not all retail is created equal. Our exposure to affluent and densely populated urban areas, with deep employment, will support a continued solid performance in a subdued market.”
