Fill 'er up: Cheaper fuel predicted to pump up retail sales and drive rental growth.

Fill 'er up: Cheaper fuel predicted to pump up retail sales and drive rental growth. Photo: Supplied

The fall in the fuel price will provide some relief for consumers and also property classes that are reliant on transport, such as retail and industrial landords, according to agents.

Goodman Group's chief executive, Greg Goodman, said the lower petrol would be welcomed by the delivery businesses that service the industrial property sector.

However, falling petrol prices are being tempered by the falls in resources, which is negatively impacting the mining-focussed capital cities.

CBRE's senior research manager Bradley Speer, says total return for retail and industrial sectors is most strongly correlated to oil price movements with a lag of five quarters, supporting the expectations of improved performance from these two sectors in 2015/16.

Mr Speer said, in a new report, lower petrol prices would translate to about $6 billion in additional disposable income annually, if fuel prices remained at current levels. To put that in context, if all of these savings were spent at the shops, Australia's annual retail turnover would increase 2.3 per cent.

"Cheaper oil prices result in higher consumer confidence with a lag of roughly for the next nine months…this supports expectations of improved consumer sentiment from second quarter, 2015, which will benefit retailers and help support more favourable rental growth in the retail sector in 2015/16," Mr Speer said.

For the transport and warehousing and the wholesale trade sectors, the cheaper fuel and improved conditions for businesses operating in these sectors will underpin the pick-up in rental growth that CBRE has been forecasting for some industrial markets (especially Sydney and Melbourne) in 2015/16.

"Lower oil prices increase bottom lines for retailers (via increased revenue) and many forms of industry (via lower costs)," Mr Speer said. "A healthier bottom line improves the capacity for tenants to pay rent and, if sustained, this drives rental growth, particularly in locations with strong tenant demand.

"Expectations of rental growth then results in downward pressure on yields and upward pressure on total returns. In our view, the relationship between oil prices and total returns for retail property, combined with the current expansionary monetary policy setting, supports our forecasts for improved rental growth and yield compression in the sector in 2015/16."

Peter Studley, the DEXUS general manager research, said the sharper than expected falls in commodities, including iron ore and oil, will put downward pressure on the Australian dollar for an extended period and deepen the contraction in mining investment. The primary effect will be to constrain the short-term growth outlook for those state economies which are most reliant on resources.

"Conversely New South Wales and  Victoria will benefit from low interest rates, low petrol prices and the low AUD," Mr Studley said.

This comes as the retail turnover growth lost momentum in December with 0.2 per cent monthly growth, but the quarter-on-quarter growth of 1.5 per cent remains quite strong and will contribute to GDP growth for fourth quarter 2014.