Retail Property Operators in Australia Industry Market Research Report Now Updated by IBISWorld

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Poor consumer confidence, competition from online retailers and an oversupply of retail property have been key challenges for the industry over the past five years. For this reason, industry research firm IBISWorld has updated its report on the Retail Property Operators industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

While vacancy rates have improved over the past five years, this has largely been due to the use of leasing incentives and low rental prices

The Retail Property Operators industry in Australia is battling many of the same enemies that the retail sector faces. Poor consumer confidence, competition from online retailers and an oversupply of retail property are among the key challenges. The retail property market showed signs of improvement over 2009-10 after a disastrous period following the global financial crisis. However, retail conditions faltered during 2010-11 as global economic uncertainty weighed on consumer spending. According to IBISWorld industry analyst Sebastian Chia, “while vacancy rates have improved over the past five years, this has largely been due to the use of leasing incentives and low rental prices.” IBISWorld expects that revenue for the Retail Property Operators industry will grow at a compound annual rate of 4.6% over the five years through 2014-15, to reach $18.5 billion.

Industry revenue growth is forecast to be weaker in 2014-15, at 2.4%. Despite record low interest rates, unemployment is rising and consumer confidence is faltering. “While demand is slowly creeping up to match supply, there is still an undersupply in some segments and an oversupply in others,” says Chia. Many retail property operators are foregoing short-term profit to minimise vacancy. Developers are attempting to cater to the segments within retail that are performing well, such as supermarkets and luxury retail. Despite weak growth in the retail sector, significant structural challenges remain. Online trends are contributing to a change in the type and size of property demanded, and retail property operators will need to select assets and tenants carefully over the next five years. Many specialist retailers will require less space as they focus on improving the shopping experience and minimising stock stored in shops. Within specialty retailing, the luxury retail market is expected to move from strength to strength, presenting an opportunity for retail property operators. Shopping centres anchored by supermarkets are expected to continue to draw customers, as supermarkets are insulated from declines in consumer confidence. This will benefit specialty retailers within these shopping centres.

The majority of the Retail Property Operators industry consists of individual investors, property syndicates and smaller property groups and trusts. This indicates that the market is not dominated by any individual company, but is driven by many different players. Concentration had been slowly increasing over the 2000s, however, the advent of the global financial crisis changed the market. The market share of the four largest players fell significantly, before rebounding as the economy stabilised. Concentration is expected to grow over the next five years, as more retailers look to take risky property assets off their balance sheets in favour of renting. While overall industry concentration is low, it is much higher in the shopping centre property segment.

For more information, visit IBISWorld’s Retail Property Operators industry in Australia report page.

The industry is made up of companies engaged in the leasing of retail property.

Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau

IBISWorld industry Report Key Topics

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
IBISWorld
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