Our CBD ‘is A-OK’

JOHN VAN KLAVEREN
Geelong’s so-called CBD crisis is perception rather than reality, according to a leading property valuation firm.
Opteon Victoria research manager Richard Jenkins said Geelong’s central business district was in fact healthy and positioned for rental growth
His analysis had found a CBD retail vacancy rate of 8.3 per cent, with six large premises skewing the result.
“While that’s higher than where we’d like it to be, if we take out the six vacant shopping premises over 600 square metres (of floor space) the vacancy rate falls to 4.5 per cent,” Mr Jenkins said.
“A vacancy rate under five per cent is a good position for rental growth.”
Mr Jenkins suggested subdividing the six large vacant buildings.
“Larger spaces are not relevant to current retailers. Tenants looking for that amount of space are interested in the regional homemaker type sites,” he said.
“It’s up to landlords and other stakeholders to work out an alternative use for those sites. My advice would be to slice those larger spaces into multiple tenancies.”
Mr Jenkins said he ran his analysis to find out what was “really happening” in the CBD.
“There’s been a lot of discussion in the media about vacancies in the CBD, leading to a perception in the market that the space is in crisis but the numbers don’t support that. The CBD is healthy and in a good position to promote rental growth.
“In fact, rents have grown in the past five years. Vacancies have declined despite the Westfield expansion and the global financial crisis.
“The Westfield expansion actually stimulated the take-up of retail space in the CBD. Demand for traditional retail sites is healthy.”
“Having a few high-profile vacancies just fed the perception that Geelong’s CBD was in crisis.”
Mr Jenkins said recent closures of high-profile retail chains also painted a misleading picture of central Geelong.
“The issue for the recent retail failures was not falling sales but exposure to debt by the parent company. The problem was finance, not turnover.
“And internet shopping still accounts for only one to three per cent of total retail turnover.”
Mr Jenkins said the outlook for the CBD was bright.
“The population growth of the region bodes well for further retail development,” he said.
“National tenants are looking at Geelong with Witchery and Macpac opening outlets in the CBD.
“Geelong has great opportunities with Deakin’s waterfront campus, the arts and culture precinct and the railway station precinct development.
“Options like student housing, general residential spaces and office space should be considered.
“The success of the TAC should be replicated and government should explore further options in encouraging other agencies or private organisations to set up offices in Geelong.”
Mr Jenkins will deliver his analysis to a Geelong Chamber of Commerce President’s Lunch this Friday.