Double Bay Shops Fight Back

Sydney Morning Herald

Saturday May 24, 2008

Carolyn Cummins Commercial Property Editor

HAVING been hard hit by the opening of Westfield Bondi Junction, retailers in Double Bay, like those on Oxford Street, Paddington, are seeing a slow resurgence.

It has been a hard slog in the area for the past five years, after shoppers and retailers left for the larger Westfield mall.

However, as tastes have changed in favour of the more boutique shops and cafes, neighbourhood centres are being revived. The increased demand for sites is being reflected in rents, which have shown some gains, and vacancies, which have been declining.

Providing a much-needed fillip has been the decision by overseas retailers to move into Australia, particularly the higher-end suburbs. Names such as Zara, H&M, Top Shop, Gap and Banana Republic are said to be showing interest in setting up shops.

Stephen Bowrey, manager of retail for Colliers International, is handling the leasing at the refurbished Cosmopolitan Centre, which sits under the new seven-level apartment building called Stamford Cosmopolitan at Double Bay. He said already there had been significant interest in the centre from national and international retail brands.

"Council is just about to start on a street beautification program, and there are five or six retail and office redevelopments which should be completed around the same time as Stamford Cosmopolitan," he said.

"This is off the back of the development of the former Westpac building on the corner of Knox Street and New South Head Road, which was 94 per cent precommitted during construction."

Revitalisation of neighbourhood centres has come at a time of volatility in the retail sector as higher interest rates and fuel costs take their toll on household budgets.

However, figures released this week show there is a glimmer of hope. After a disappointing first few months in of the year there has been some welcome news, with the Westpac-MI Consumer Sentiment Index recording a moderate gain of 2.7 per cent to 89.8 points in May.

Jones Lang Lasalle's research team said the index showed that after zero turnover growth (seasonally adjusted) in January and a modest 0.1 per cent decline in February, March saw positive turnover growth of 0.5 per cent.

While "the full impact of the February and March interest rate rises will take time to realise", the effect of a growing economy, constrained by capacity, continueD to drive inflationary pressures, Jones Lang LaSalle said.

"Citing evidence of a slowdown in demand and difficult conditions in international financial markets, the [Reserve Bank] decided to leave rates on hold at 7.25 per cent in May." In a further break for consumers, the Federal Government's promised tax cuts had been confirmed in in the budget last week.

The firm said the "all groups" CPI rose by 1.3 per cent in the March quarter, bringing the annual rate to 4.2 per cent, well in excess of the Reserve Bank target band of 2 to 3 per cent. This may further tempt the bank to increase rates, though many suggest we are now at the peak of this interest rate cycle.

© 2008 Sydney Morning Herald

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