New floats on retail scene

The coming months will see several retail real estate investment trusts offered as new floats, at a time when the underlying consumer sector remains under pressure.

But analysts have said that while shoppers remain cautious, owning bricks-and-mortar malls is still favoured.

This is because of rising land values and the fact that landlords can generate income from a variety of areas in a mall, such as food courts, a percentage of cinema ticket sales, international fashion brands and mobile devices.

That helps to offset falling rents from discretionary goods such as mid-range fashion, homewares and high-end jewellery.

In the past six months more than $3 billion of retail assets have changed hands.

CFS Retail has added to the momentum with the conditional sale of four shopping centres in Victoria to the proposed Pacific Retail REIT, which is looking to float in the next few months with an initial raising of $400 million.

This comes after US private equity group Blackstone late last week filed a registration statement with the US Securities and Exchange Commission relating to the proposed IPO.