Retail owner Vicinity says shopping malls in the larger states of NSW and Victoria have been hit hard by the forced closures, but it looks like shoppers are returning as the Christmas season approaches.

In its quarterly update from the end of September, sales fell in the apparel and discretionary sectors as expected, although tenants who had effective online offers and click and collect performed well with buyers stuck at home.

Vicinity says its tenants will continue to face pressure from staff shortages, excess and changing seasonal inventory levels in New South Wales and Victoria, as well as higher costs and delays associated with freight distribution.

Overall, for the three months ending September, the portfolio’s total retail sales declined 25.7% from the same period in 2020, but increased 7.1% in the lower states. less affected.

Vicinity’s Queen Victoria Building (QVB) is one of Sydney’s best-known and best-connected shopping centers.Credit:Sam mooy

During the quarter, 369 leasing transactions were completed with an average spread of minus 7.2%, compared to 1,257 transactions and minus 12.7% in fiscal 2021.

With a 72% higher than expected retention rate for the quarter, the occupancy rate stood at 98.1% at the end of September 2021, just 10 basis points lower than three months earlier.

Vicinity Managing Director Grant Kelley called the quarter “difficult”, with prolonged lockdowns in New South Wales and Victoria impacting the performance of the portfolio.

“However, retail sales in normal COVID states remained strong, and we are delighted with the rebound in visits to NSW and Victoria, as restrictions began to ease in October,” he said. .

“We are optimistic that the positive momentum will continue in the second quarter of fiscal 2022 as the holiday season approaches and with the resumption of interstate and international travel, but we nevertheless maintain a level of caution with the planned expiration. respective deadlines. Codes of conduct for SMEs, currently in force in NSW and Victoria, as of January 2022. “

ASX-listed Vicinity has a market value of $ 8.05 billion and owns and manages $ 22 billion in retail assets under management in 60 shopping centers. It owns half of the Chadstone Shopping Center in South East Melbourne and in Sydney’s CBD along with the Strand, QVB and The Galleries.

Due to continued uncertainty resulting from the COVID-19 pandemic, Vicinity continues to withhold its earnings guidance for this fiscal year.

Convenience stocks fell 2.5 percent to $ 1.72.