Rosy figures for retail landlords
Sydney Morning Herald
Saturday September 5, 2009
ONE OF the highlights of the 2008-09 reporting season was the strength of the underlying business for retail landlords.Without exception, all of the large trusts, including bellwether Westfield, CFS Retail, Mirvac, GPT and Stockland, said sales remained strong, despite the weak economy. That is thanks to the stimulus packages, low interest and stabilisation of the jobless rate.The August issue of Urbis's Retail Perspectives says consumer fundamentals remained modestly positive throughout the second quarter but picked up markedly in July and August. The Urbis Consumer Spending Barometer measured +7 on a scale of -13 to +13 in both months, the highest since November 2007."In the five-year history of the barometer, its current level has been bettered only six times. The barometer represents a nice summation of why current sentiment within much of the economics profession is cautiously optimistic," the report says."If you were to have been offered this scenario for August back in November 2008 when things looked so bleak, you probably would have taken it in a heartbeat."According to the report, consumers have still not been confronted with a full-scale implosion of the job market, which has remained quite robust.Urbis's report says that in July, hours worked were down by 1.3 per cent since the beginning of the year and by 0.4 per cent since June. "This has possible ramifications for retail spending as the income cushion provided by the stimulus payments tails off."But the positive underlying figures for consumer spending, released by the Bureau of Statistics during the week as part of the national accounts statistics, also show Australian consumers spent big on games, toys and hobbies over the past year. We bought fewer new cars, gambled less and made fewer visits to the doctor.Craig James, the chief economist at CommSec, said either fewer people were dying or they were spending less on their departures from this world: spending on funeral services slumped by more than 26 per cent."We also spent more on dentist bills over the past year [up almost 10 per cent] with school fees up 9.4 per cent, rents rose 9.1 per cent and even dry-cleaning expenses up 8.6 per cent," he said."Overall, household spending grew by 5.4 per cent over the past financial year, so it is clear that regular bills like school fees and electricity rates have been burning holes in our pockets."
© 2009 Sydney Morning Herald