An artist’s impression of the H&M store in Pitt Street Mall’s Glasshouse building.
The opening of Swedish fast fashion giant H&M Australia’s store this weekend in Sydney’s Pitt Street Mall will boost revenue for city retail landlords, agents says.
It follows Forever 21, Zara and Uniqlo onto the strip. They were the first major international brands to put the area on the global map.
CBRE said that with openings or leases secured on more than 30 new stores, the pace of first-time international brand entrants and expansion in Australia continued unabated.
This compares with more than 35 new openings and lease deals for 2014, CBRE’s third-quarter 2015 Retail MarketView shows.
CBRE’s senior research manager, Danny Lee, said Sydney and Melbourne had had the highest activity in 2015, followed by Brisbane and Perth.
“Foreign brand penetration in Australia is fairly low in comparison to other countries at 28 per cent, which is a key attraction for these offshore retailers,” Mr Lee said.
“It would take an additional 50 brands to enter the market to reach the same level as some Asian countries, such as Singapore and Hong Kong, with 90 more required to reach the UK’s level of 57 per cent.”
CBRE’s head of retail tenant representation Australia, Tim Starling, said the low penetration rate in Australia served to minimise competition between foreign brands.
“Other key attractions for foreign retailers include the fact that Australia is one of the highest-consuming developed nations, with consumption per capita growing at twice the rate of the US between 2008 and 2014,” Mr Starling said.
CBRE’s head of retail brokerage leasing Australia, Leif Olson, said the impact on the market would also mean that super prime rents would grow by a forecast 4 per cent per annum over the next three years