Just 43,000sqm of new retail space will be delivered in Perth between now and 2026 - less than half the 10-year average - limiting options for occupiers in the future and positively impacting rental growth. 

CBRE’s latest Western Australia Retail Market Overview highlights a range of positive indicators for retail landlords, including the lack of new development, given the historical average is 116,000sqm of new supply over a three-year period.

CBRE Research Analyst Cameron Douglas-Perrine noted, “Occupiers seeking out high-quality new supply will have limited options over the next few years. We expect this to have a positive impact on rental growth in the medium term as landlords gain bargaining power in the under-supplied market.” 

The report highlights that Western Australia’s retail market is also positioned to benefit from strong population growth of 13% over the next decade, driven by both international and interstate migration, which will increase retail demand in both the short and long term.

Mr Douglas-Perrine said higher economic growth relative to other major Australian states, underpinned by the strength of both the mining sector and the labour market, would also support retail demand.

From an investment perspective, the report highlights that institutions have been the most active purchasers of shopping centres in Western Australia, accounting for 64% of deal activity in the past three and a half years.  

Neighbourhood shopping centres have been the most actively traded, followed by sub-regional shopping centres, with only one CBD asset traded. This has been highlighted by the recent acquisitions of Busselton Boulevard Shopping Centre and Margaret River Shopping Centre by Centuria Capital Group for a combined sale price of $31 million.

“Institutions continue to dominate the market, owning 63% of the state’s shopping centres, compared to private owners (32%) and family office/trusts (5%),” CBRE Retail Capital Markets National Director James Douglas said. 

“This institutional ownership is even more concentrated on a square-metre basis, with REITs, superannuation funds and investment management firms controlling 1.8m square metres of shopping centre stock, or approximately 80% of the market.” 

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