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Sydney retail rents climb
Released 16 September 2010

Retail rents in the Sydney CBD continued to spike in the first half of 2010, despite a slowdown in retail trade, according to CB Richard Ellis research. 

CBRE Global Research and Consulting Senior Analyst Florisa Anolin said the ongoing revitalisation of Pitt Street Mall and deals negotiated in the newly opened Mid City Centre had helped drive a 6.6% increase in Pitt Street Mall rents to an indicative level of $8,060sqm.

Prime rents also recorded robust growth, rising by 5.7% over the same period to reach an indicative level of $2,777sqm.

Secondary retail precincts also shared in the growth, with rents in this sector of the market increasing to $1,640sqm.

However, with the exception of Pitt Street Mall, rents are tipped to plateau in the short to medium term in what is likely to be a challenging period for the retail sector.

"Super Prime rents are likely to increase further after the much anticipated opening of Westfield Sydney, with this project and the new Mid City Centre having raised the calibre of the CBD retail offering by luring local and international chains in the city core," Anolin said.

"However, as tenants relocate to stage one of Westfield Sydney, CBD retail vacancy is likely to increase as temporary accommodation is sublet and retail competition increases. This should bring downward pressure on Prime and Secondary CBD rents in the next 12 months, as retail spending continues to stagnate."