1 CBRE RESEARCH | © 2020 CBRE, INC. REAL ESTATE MARKET OUTLOOK CBRE RESEARCH | APAC AUSTRALIA RETAILRE T A IL M A RK E T O UT L O O K 2 0 2 0 | CB RE CBRE RESEARCH | © 2020 CBRE, INC.CBRE RESEARCH | © 2020 CBRE, INC. FOR 2020 2 The Australian retail sector is going through a period of transformation with changing consumer habits impacting the performance of bricks and mortar retailers. Retailers who fail to adapt to these changes by improving their online platforms and investing in customer experience will likely be impacted most. RETAIL MARKET OUTLOOK 2020 will be a challenging year for the retail sector as continued headwinds impact retailers and landlords alike. However, the changing retail landscape presents an opportunity for investors, landlords and retailers to transform retail centres into mixed use hubs to futureproof against continued change. Kate Bailey Associate Director, Head of Logistics and Retail Research T +61 3 8621 3411 E kate.bailey@cbre.com.auSTATE OF THE MARKET REAL ESTATE MARKET OUTLOOK 2020RE TAI L M AR KE T O U TL O O K 20 20 | C BR E STATE OF THE MARKET CBRE RESEARCH | © 2020 CBRE, INC. 4 Source: ABS, CBRE Research Sub-regional and strip retail saw downwards rental reversion in 2019 Pharmaceutical, cosmetic and toiletry goods have seen the highest retail trade growth at 5.2% Retail trade growth steady at 2.7% THE RETAIL SECTOR IN AUSTRALIA WILL CONTINUE TO SEE THE IMPACTS OF AN EVOLVING MARKET IN 2020 RE T A IL M A RK E T O UT L O O K 2 0 2 0 | CB RERE T A IL M A RK E T O UT L O O K 2 0 2 0 | CB RE CBRE RESEARCH | © 2020 CBRE, INC. RETAIL TRADE GROWTH HAS 5 STATE OF THE MARKET SOFTER AVERAGE GROWTH IS IN LINE WITH FLAT WAGE GROWTH Source: ABS -0.5 0.5 1.5 2.5 3.5 4.5 5.5 Nov-13Nov-14Nov-15Nov-16Nov-17Nov-18Nov-19 ANNUAL CONTRIBUTION (%) CL O TH I N G & F O O TW E AR DE P A RTM E N T S TO RE S HO U S E HO L D G O O D S GR O C E R Y OTHE R F & B RE TA I LE R TU R N O V E R G R O W TH Contribution to retail turnover growth 4. 5% A V E RA G E2. 8% A V E RA G ERE T A IL M A RK E T O UT L O O K 2 0 2 0 | CB RE CBRE RESEARCH | © 2020 CBRE, INC. 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% GroceryHousehold GoodsClothing and FootwearDepartment StoresCafes, Restaurants and Takeaway Food Total Retail Trade National Performance by Category ACROSS MOST CATEGORIES 6 STATE OF THE MARKET Source: ABS 2020 NO V 1 9NO V 1 35 Y R A V ERA G ERE T A IL M A RK E T O UT L O O K 2 0 2 0 | CB RE CBRE RESEARCH | © 2020 CBRE, INC. CONTINUES TO GROW 7 STATE OF THE MARKET Source: CBRE Research, January 2020 VA L U E & M I D RA N G E F A S HI O N CAF ÉS, R ESTAU R AN TS, TA KE A W A Y F O O D New retail entrants to Asia Pacific An increasing number of OFFSHORE FOOD & BEVERAGE GROUPS ARE ENTERING THE MARKET 20122013201420152016201720182019 Q1-Q3RE T A IL M A RK E T O UT L O O K 2 0 2 0 | CB RE CBRE RESEARCH | © 2020 CBRE, INC. HAVE SEEN THE GREATEST NUMBER OF INSOLVENCIES 8 STATE OF THE MARKET Source: CBRE Research Mid range fashion retailing has seen significant impact from ecommerce. Number of major retailer insolvencies by category SP E CI AL I ST CL O TH I N GFO O D R E TA I L I N GHO M E W A R E & D E P A R TM E N T S TO R EMI D R AN G E F ASHI O NOTHE R HE A L TH & P E R S O N A L C A R ECO N SU MER E L E CTR O N I CSASP I R ATI O N AL F ASHI O NCO F F E E & R E STAU R AN T 0510152025 2015 2016 2017 2018 2019 INSOLVENCY BY NUMBER 41% OF ALL INSOLVENCIES over the past five years have been clothing retailersRE T A IL M A RK E T O UT L O O K 2 0 2 0 | CB RE CBRE RESEARCH | © 2020 CBRE, INC. 9 STATE OF THE MARKET THIS WILL TRANSFORM THE RETAIL LANDSCAPE Alexander McQueen HublotBalenciagaArc’teryx Celine Mulberry Audemars Piguet 1Rebel Yves Saint Laurent Tory Burch Taco Bell Haidilao Hot Pot Barry’s BootcampNext >

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