Retail Returns to Favour
Posted on 31. Mar, 2010 by Chris Lang in Economic Issues, Interest Rates, Investment Opportunity, Property Yields, Retail Sector
Retail property has had some press coverage of late.
It has shown a surprising improvement, given global events and the hike in interest rates.
Westfield (a good retail barometer) reported a strong mid-year result from its Australian shopping centres.
As you can see from the table, Vacancy rates have fallen significantly and Yields firmed — particularly within the strip shopping centres of Melbourne.
And furthermore, rentals have also started to climb ... as the economic recovery has given shoppers confidence to start spending again.
Currently yields ranging between 4% and 6.5% across these various strip centres. And would indicate that investors are returning to retail property once more.
If you are planning to acquire some Retail property, you need ...-
1. A strong tenant (well-established, or proven backing);
2. A long lease (5 years+); and also
3. Solid rental reviews (CPI or at least 3.75% pa).
With these in place, you should be able enjoy a good long-term investment.
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