In April 2017, Amazon.com Inc announced plans to enter the Australian market with local fulfilment centres. Currently, Australians purchase goods from Amazon through Amazon US. Market reaction has been negative, as both retailers and retail A-REITs have since underperformed by a large margin. Headlines proclaiming the impending death of brick-and-mortar retail due to online purchasing abound in Australia and elsewhere in the developed world. In short, conventional wisdom today says the shopping mall is dead. We believe a more nuanced view about the future of retail is in order. In the following, we review the implications of Amazon’s entry into Australia and broader considerations for A-REIT investors.

Although it might seem most retail goods are purchased online today, the truth is only about 10 percent of global retail sales are completed online. This share is consistent in most places around the world, even in the United States, where Amazon has been operating since the