morganstaleychart

Australian retail rents the highest in the world: Report

We often hear that Australian retailers do it tough – suffering from a combination of the highest rents in the world, the highest labour costs, and the highest cost of wholesale goods. We’ll explore labour and wholesale costs another time, but today we have confirmation that our rents are indeed amongst the highest in the world.

According to research by Morgan Stanley, Australian retailers pay significantly higher rents than offshore retailers in comparable markets, in all categories of retailing. The report compared Australian retailers to comparable ones in the US and UK, and found that local rents were higher in almost every situation, in some instances nearly 4 times higher!

Retail rents are currently being reviewed by the Productivity Commission, where the Westfield Group defended the rents it charges retailers, saying they are a product of market forces, but there is mounting opposition to this claim. Collapsed bookseller REDGroup highlighted rental costs as a major issue facing retailers, and the Australian Newsagents Federation claimed in its submission that Australia’s 1,500 newsagents are at the mercy of their landlords when it comes to negotiating rents and leasing terms.

Read the full story here: Australian retail rents the highest in the world: Report