High vacancies in the office market have resulted in a lot of empty shops. (ABC News: Hayley Roman)
If you’ve been thinking there are a lot of empty shops in Perth’s CBD, you are correct.
The closure of Topshop a week ago has left a sizeable hole on Murray Street and dozens of other stores are sitting empty.
Property Council WA executive director Lino Iacomella said the current vacancy rate was around 16 per cent.
“Retailers in the city are struggling at the moment,” Mr Iacomella said.
“That’s largely because their biggest consumer market is the office workers and at the moment we’ve got high vacancies in the office market.”
He said the shopfront vacancy rate has not been this high for about 20 years.
“That’s about the last time we had a lot of vacancies in the office market so there’s a close parallel there,” he said.
City retail redevelopments ‘imminent’
Lease Equity managing director Jim Tsagalis said a lot of the vacancies could be attributed to upcoming developments.
Mr Tsagalis is optimistic about new opportunities from hotels, flight paths and Perth Stadium. (ABC News: Hayley Roman)
“Forest Chase is about to have a $100-million makeover, with more than 35 new retailers being introduced into the city,” he said.
“Raine Square at the moment is [being redeveloped], it’ll have another 30-odd retailers go in.”
“Plaza Arcade, 10 to 15 retailers are being dislodged to make way for Uniqlo.”
Mr Tsagalis added Perth’s main pedestrian precinct had more than 100 different owners, unlike Melbourne and Sydney’s prime malls which were controlled by less than five main owners.
“That means it’s more coordinated. Perth is moving in that direction… and in time, I think we’ll find it’ll be more coordinated but in the short term it’s different owners, different agendas and that means different time paths,” he said.
Mr Tsagalis was optimistic about the opportunities brought by new hotel rooms, direct Perth to London flights and Perth Stadium.
But he said retailers still face challenges.
“Clearly, Perth is suffering but more broadly, we also have internet [shopping], international retailers coming into Perth and indeed Australia, so there’s real change. There’s a revolution,” he said.
Empty windows not a concern for shoppers
Mandurah residents Richard and Carol came in the city for Sunday shopping. They said the empty stores were not a deterrent.
“You can’t sort of stop progress, they’re only trying to make it better for the future,” said Carol.
“A day out really it what it’s about,” said Richard.
Ruby was shopping with a friend and said she was happy with the city retail experience.
“The shops are really good, there’s lots of new stuff out, and lots of sales on,” she said.
Mr Iacomella said he expected Perth’s retail vacancy rate had peaked, as office vacancies had begun to recover.
However, he said it was important not to rely on upcoming developments to solve Perth’s retail vacancies.
“The challenge is to broaden out the shopping market, to increase the market from beyond just office workers but also attract people from all around Perth and then of course the tourist market,” he said.
Mr Iacomella said about half the current retail vacancies could be attributed to redevelopments, while the remainder was due to the economic situation.
The City of Perth said the fact international investors had committed $350 million to the city’s retail precincts in coming years showed confidence amid a subdued economy.