Sydney, together with Hobart, have recorded the highest increase in suburban convenience shopping centre yields over a 12 month period, while Darwin was the only city to demonstrate a decrease, according to a nation-wide study compiled by independent property advisors Herron Todd White.

According to Chairman of Herron Todd White, Peter Degotardi, the market peaked in late 2007, and over the ensuing year there has been an expected reweighting of yields for convenience centres. 

"Risk is never priced correctly in boom periods and convenience centre yields just got compressed when compared with the safer regional centres," he said.

The study demonstrated that in September 2007, Sydney yields for a typical suburban convenience centre that contains a supermarket (tenant in place) plus 6-10 specialty stores, were around 7.00%; however this has now increased to 8.00%. Hobart's yields also increased 1%, from 6.50% to 7.50%.

According to Sydney Director of Herron Todd White, Matt Shadbolt, vacancy rates within the Sydney retail property market had continued to fall whilst national monthly turnover increases have trended down to 0.1% growth over the past four months.

Melbourne recorded a yield increase from 6.75% to 7.25%, one of the lowest increases among all Australia's capital cities.

"Victoria's continued strong population growth is a significant long-term positive and capitalising on this fact may offer investors further opportunities with retail property.  Shopping centres within growth corridors such as Pakenham, Mernda and Werribee may continue to perform well," Melbourne Director Craig Veljkovic said

All other capital cities demonstrated a mixed increase in yields, with the exception of Darwin, which actually showed a decrease, from 8.00% last year to 7.75% this month. In March last year, Darwin was leading all other Australian capital cities, with the highest suburban shopping centre yield. 

According to Mr Degotardi, Darwin historically has higher capitalisation rates due to it's remoteness from other capitals and its smaller economic base.

Adelaide demonstrated the smallest increase, from 6.75% last year to 7.00% now, while

Brisbane and Perth displayed yield increases of almost 1%, both moving from 6.75% last year, to 7.50% presently, and finishing up higher than Melbourne's current yield.

Mr Degotardi said that the retail sector in Perth remained a sellers' market though with retail properties still tightly held and strongly competed for when offered to the market.