Almost every large-scale shopping centre has defied the widespread sales downturn with annual turnover among the nation’s 93 “big gun” shopping centres rising 13.1 per cent. At the same time, separate new data has found investment demand for the shopping giants has also turned a corner - JLL announcing this week that transactions of the retail sector’s biggest assets in the last quarter of 2023 surpassed all those in office and industrial for the first time since 2004.

Our love of retail therapy isn’t the only reason for the revival of these “big gun” centres – defined by those that cover more than 50,000 square metres and come with a full complement of supermarkets, department stores, specialty stores and discount outlets.

It’s also the basic desire for social connection, entertainment and increasingly play with interactive stores like Monopoly Dreams and good old-fashioned cinemas among these centres’ biggest draws.

“Larger regional shopping centres in Australia are resurging in performance,” said JLL’s Senior Director of Retail Investments Australia & New Zealand Nick Willis. The centres were appealing to an “increasingly wider array of capital” Mr Willis added, plus “witnessing a wave of maiden investors” as well as core institutional capital. Private investors and syndicators now made up 80 per cent of the total transactions in 2023 as they hunted for higher yielding opportunities that offered them a yield spread to underlying debt costs.

The latest findings are some much-welcome green shoots in a retail landscape laid barren by months of either flattening or falling sales. Analysts are forecasting gloomy conditions to continue amid cost-of-living pressures and the expectation for interest rates to remain at current levels until at least the end of the year.

 Secrets of success

The top spot for “big gun” shopping centre with highest Moving Annual Turnover (MAT) per square metre was taken out by Melbourne Central. Located in the central CBD atop the train station where tenants suffered greatly during pandemic lockdowns, its MAT hit $17,096 per square metre to trounce that of Mirvac’s Sydney Broadway Centre where space now costs an average $16,449 per square metre. Entertainment and a hankering for new experiences were some of the biggest drivers of higher visitation and turnover after consumers flocked to the new breed of interactive retail outlets like Monopoly Dreams, cinemas and revamped food courts featuring more fashionable and edgier eateries.

“The recovery has been exceptional,” said Chris Barnett, GPT’s head of retail and mixed-use Chris Barnett. “Office workers are yet to fully return to the CBD but it’s clear Victorian shoppers have embraced the importance of a vibrant city centre."

Taking out top spots

Another Melbourne giant, Chadstone Shopping Centre, took first place for overall moving annual turnover with $2.67 billion. Scentre Group’s Westfield Chermside Brisbane came in second with an MAT of $1.3 billion, a 6.3 per cent increase. In more encouraging news for the retail sector as a whole, three more centres joined the ranks of those with $1 billion-plus turnover – Westfield Parramatta in Sydney, Westfield Doncaster in Melbourne and in Queensland, QIC’s Robina Town Centre – bringing the total number of Australian $1bn-plus turnover shopping centres to 12.

Soldiering on

Still, preliminary forecasts by Australia’s largest independent research company Roy Morgan put overall retail sales growing just 1.2 per cent in 2024. This however will be offset by usual seasonal trends like Christmas sales and November’s Black Friday sales. And it could even be revised altogether according to the firm’s analysts, thanks to the potential for the second half of the year to deliver in the way of lower inflation, interest rate cuts coming sooner rather than later, stage 3 tax cuts which despite modifications look to benefit middle income earners, and a drop in electricity triggered by July’s 50 per cent drop in wholesale energy costs flowing down to retail prices. Here’s hoping!