The Franchise Centre

White Paper Excerpt: 'Shopping Centres - an Inconvenient Truth'

By Peter Buckingham CFE CMC

The inconvenient truth of shopping centre

How do shopping centre owners press for increases in rents of 4% or 5% pa. when the increase in the $ / sq m. sold through the Centres has been increasing in the range of 0.5% – 1.65% pa. over the last few years?

Using data provided by The Property Council, and originally sourced from the Shopping Centre owners, the logic for these increases is not substantiated.

By doing a longitudinal study of a large group of shopping centres, and using The Property Council data, we can see that the $ / sq m (overall for the SC’s) has risen far less than CPI, and far, far less than the annual rental increases that become written into the Leases.

Type of Centre
Sample size
% Increase 5 years to 2017
% increase pa
Super Regional
15
7.54%
1.51%
Major Regional
30
8.18%
1.64%
Regional
29
7.85%
1.57%
Sub Regional
90
4.76%
0.95%
Neighbourhood
53
8.15%
1.63%
City Centre
18
2.54%
0.51%

Derived using MAT / GLAR from 2012 and 2017 Property Council data 
 

A full copy of the White Paper is available here »


Peter Buckingham Peter Buckingham is the managing director of Spectrum Analysis Australia Pty Ltd , a geodemographic and statistical company. Peter is both a Certified Management Consultant and a Certified Franchise Executive.

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