The retail rebound is very much on the minds of the retail industry and the wider Australian community as consumers, brands and places eagerly await closures to lift and enter the market. new standard for offline shopping environments. State-imposed lockdowns have imposed significant impacts on retailers and consumers across the country since the pandemic first hit Australians in early 2020.
These extended shutdowns have forced retailers to innovate and adapt their retail strategies with new ones; online, click-and-collect and buy now / pay later capabilities crucial for retailers who must overcome periods of trade disruption as consumers are forced to move away from normal shopping environments. It is clear from the ABS figures of July 2021, which captured Australia’s activity out of lockdown, that retail remains highly desirable for consumers, especially when encountered with retailers that continue to evolve. to answer the question.
Two Tier CBD Retail Markets
The Sydney and Melbourne CBDs have faced multiple prolonged shutdowns, which have exposed significant retail store closures and vacancies, occurring in an environment where retail stores demand some of the highest retail rents. The country’s highs were faced with drastically reduced foot traffic and commerce as consumer commuters and tourists alleviated.
A two-tier retail market has emerged, where an unusual increase in the rental supply on the main streets of the CBD has been supported by qualified demands from top national and international brands seeking top brand positioning opportunities. range.
During the pandemic, these brands remained active in online shopping and national retailing. In contrast, secondary shopping districts, which are typically occupied by smaller rentals and dependent on foot traffic, have been severely impacted by the reduction in commuter traffic, the retail vacancy rate in some hub assets. CBD suburbs exceeding 25%.
A time of opportunity for the major retail chains
While this period of volatility has negatively impacted all categories of CBD retail, many brands and owners have taken this period as an opportunity to reinvent CBD retail landscapes, store strategies and experiences. development of flagship stores in preparation for the inevitable ‘CBD retail rebound’. Big brands took advantage of this rare opportunity to enter the retail CBD market and secure new premises at competitive rates.
Over the past 12 months, Colliers has supported the strong influx of new brands and amenities through Sydney CBD; securing a 900m2 flagship product on George Street for the UFC’s CBD Flagship, which will open in 2022 and international restaurant brand Hai Di Lao on a 600m2 360-degree rooftop in Darling Harbor in Sydney.
Some of Sydney’s existing High Street brands have also taken the opportunity to rethink their layout experience, aligning store closings as traffic and commerce are impacted.
This includes the complete refurbishment of Dior’s flagship at the corner of King and Castlereagh Street and Hugo Boss’s current refurbishment of its three-level mega store on King Street in Sydney.
Among new brands and additional relocations to Sydney’s CBD, Peloton signed a 500m2 lease for its flagship store, replacing Tesla at 20 Martin Place. 388 George Street will host Sneaker Boy’s new flagship store, and the relocated Bally brand store, Lotte Duty Free is currently building its 3,200m2 mega-flagship on Market Street and a list of high-end brands currently in the process of being built. equipping the new 25 Martin Place redeveloped by Dexus should open in early 2022.
Adelaide CBD is set to see the relocation of Rebel Sport from Myer Center, to a new 2,700m2 two-level flagship at 135 Rundle Mall.
Melbourne saw the opening of Dexus’ 80 Collins Street development with a solid mix of high-end fashion and food and drink, including the Golden Goose branded store and the Lucas group’s all-new fine dining restaurant, Society. Colliers helped Seagrass Group secure an additional 500 m2 to expand its existing restaurant on Southbank.
Brisbane has seen existing brands double in the CBD market with Gucci, Optus and Telstra securing prime new locations.
The continued interest from brands that represent the apparel, health and wellness and foodservice industries demonstrates the continued confidence of retailers in the recovery of the Australian CBD retail landscape.
High demand levels are also being maintained by international brands looking to the resilient Australian market for opportunities to inspect new premium leases across all categories. Colliers recognized the strong commitment of high-end restaurant brands, luxury fashion, entertainment and leisure groups looking to secure dominant big-box premises.
Development Driving New CBD Retail Pipeline
Australian capitals will continue to see a sizable pipeline of projects that will include new shopping malls, commercial towers and suburban station developments as part of government transport infrastructure projects, including the Sydney Metro.
For example, Sydney He alone expects around 100,000m2 of new and renovated retail space to open in the CBD over the next five years. This includes projects at Barangaroo, Martin Place, Darling Harbor and Circular Quay, including the Loftus Lane area.
New retail areas will appear in the Melbourne Walk on Bourke Street Mall accompanied by two new hotels offering 4000m2 of new shopping, The University of Melbourne, Queen Victoria Markets and St Collins Lane in Melbourne’s CBD.
AdelaideCBD s commercial offering is also expected to expand as part of the new 43,000 m2 office tower and its new 3,500 m2 commercial component in the 60 King William Street development.
Brisbane is also in anticipation of the development of Queens Wharf which will offer more than 50 new retail outlets in the CBD landscape. A substantial percentage of this new retail area is currently allocated to catering and is expected to attract consumers and increase footfall to these CBD areas.
The rebound in CBD retail
The complete restoration of the retail environment of CBD depends on several factors, including high vaccination rates, a return to the office and the reopening of international borders, and therefore it is difficult to speculate on the official dates and the value. real life of the inevitable retail of CBD. rebound. The fact remains that the CBD retail environment is intrinsic to the Australian way of life, including Sydney’s waterfront restaurants, Melbourne’s lane retail activations, luxury shopping districts and outdoor pedestrian malls. CBD Retail and its features are all part of what makes the Australian retail experience a world-class destination for retailers and consumers.
Michael tuck is the Managing Partner of Colliers Retail Leasing, Sydney. At Colliers, Michael is celebrated as the market leader in retail rental solutions for retail and market news branding strategies and development project campaigns. In addition to a portfolio of department stores, malls and large owners, Michael is currently appointed to the Sydney City Council Commercial Property Portfolio and advises on a range of major commercial development and infrastructure projects in Australian CBD.
Adrianna kazzi is the Senior Analyst at Colliers Research, Sydney, specializing in commercial real estate. Adrianna is focused on producing research information on the performance of the retail industry and the new and innovative trends that are shaping this asset class. In her role, Adrianna is involved in all of Colliers’ retail operations, including retail leasing, capital markets investment services and property management services. It is essential for improving data management systems and delivering quality real estate data and analysis to the retail industry.