Online sales hurt retail outlets who want $1000 a day Westfield rent revised downwards

Retailers and restaurant owners at one of Brisbane’s biggest shopping centres say they’re paying as much as $1000 in rent a day as foot traffic falls and stores are boarded up around them.

RETAILERS and restaurant owners say online shopping has killed foot traffic at a major Brisbane Westfield centre and their pleas for rental relief have been ignored.

One owner, who pays more than a $1000 rent per day, said they have had nothing but pushback from Westfield Carindale management over attempts to renegotiate their lease in the face of dwindling shopper numbers.

One of more than a dozen stores boarded up at Westfield Carindale. Picture: The Courier-Mail

The retailer said their rent had increased every year and had blown out beyond $350,000 per annum with no help in sight.

“For many, the rate increases at CPI without any consideration for the impact of consumers who are purchasing online, and that’s from retail clothing through to restaurants,” the retailer told The Courier-Mail.

“They are not being sympathetic to the retailers.”

Another long-term store owner, who pays more than $500 rent per day, claimed Thursday nights and Sundays were “tragic”.

“In the last five years there has been definite drop in foot traffic,” the store owner said.

“Thursday nights have had it and Sundays are tragic as well. We could get away with half of the staff that we had a few years ago.

“Five years ago there was lucky to be an empty shop and now some have been empty for a couple of years … the salad bar in the food court has been closed for about two years.”

Shoppers walk past one of more than a dozen stores boarded up outlets at Westfield Carindale. Pic: The Courier-Mail

Neither store owner wanted to be identified for fear of repercussions while others agreed with the statements, but did not want to be quoted at all.

The Courier-Mail recently visited Carindale and at least a dozen stores were boarded-up although Scentre Group, which operates under the Westfield brand, claimed more retailers were coming.

A Scentre Group spokeswoman said “99 per cent of the centre” was leased, but would not divulge if shopper numbers had declined or increased over the past five years.

Thousands visited Westfield Carindale in August 2018 to see popstar Katy Perry, who made a one-off appearance. Pic: Steve Pohlner

Although, visitor numbers would have been boosted in 2018 when thousands of Katy Perry fans turned out to get a glimpse of the popstar’s one-off appearance.

The Scentre Group spokeswoman said they had already welcomed 18 new retailers this year and other 10, including Kmart, were due to open before the end of the year.

“We are committed to continually evolving the mix of retailers and experiences we offer our customers at Westfield Carindale,” the spokeswoman said.

Cameron Taudevin, from Jones Lang LaSalle, says major department stores are downsizing and that adds to the pressure on vacancy rates at major shopping centres. Pic: The Courier-Mail

Jones Lang LaSalle’s (JLL) head of retail leasing Cameron Taudevin said retailers were doing it rough across the board.

He said vacancy rates had increased nationally in the first six months of the year and were likely to increase again in the face of large department stores reducing their floor space.

“Retail rental growth is subdued across all retail sub sectors, with incentives remaining at elevated levels,” he said.

“Downsizing by department stores and discount department stores is likely to create further pressure on vacancy rates as owners work through backfill solutions and seek specialty and mini-major tenants.”

Shopping centre vacancy rate (across regional, subregional and neighbourhood) increased by 0.4 percentage points to 3.6 per cent in June 2019 the first six months of the year, he said.

However, year-on-year, it was down 0.1 per cent on June 2018.

”Shopping centre income remains under pressure as retailers consolidate and renegotiate lease terms,” he said.

National Retail Association boss Dominique Lamb says labour costs, crime and rent/tenancy agreements are the biggest issues confronting retail owners. Pic: Peter Wallis

National Retail Association ceo Dominique Lamb said retailers were “definitely struggling” with just 0.4 per cent growth in the last quarter.

She said the NRA operated a leasing and tenancy service for its members and retailers should seek advice before entering long term agreements.

“It’s (leasing) definitely a sore point, Ms Lamb said.

“The biggest concerns for our retailers are labour costs, leasing and tenancy, and crime.”

She said online retail sales makes up about nine per cent of what Australians are spending and that’s expected to increase to 15 per cent over the next five years.

The Scentre Group spokeswoman said Westfield Carindale had the second highest sales of all centres within the Brisbane market with $869.3 million in retail trade last financial year.

“We are seeing that the majority of retailers have both a physical and online presence, with many consumers seeking inspiration instore before purchasing online, or researching online before purchasing instore,” she said.