Despite the doom and gloom preached by commentators, the disruption facing the retail industry is providing opportunities for landlords to reposition their assets and find new consumer markets.
While traditional bricks-and-mortar retailers and major department stores have struggled with falling sales, growth in the food and beverage and entertainment markets points to the potential to reinvent retail experiences, particularly in neighbourhood centres.
DMA Partners Managing Director Ryan Andersen said the growth in food and beverage and entertainment spending pointed to a shift in the focus of consumers.
“Consumers are looking for an experience when they visit a retail centre, with offerings like al fresco dining, cinemas and other entertainment uses becoming more and more important,” said Mr Andersen.
“Major and super regionals have offered entertainment and dining options for many years, but subregional and neighbourhood centres have a long way to go to be able to provide customers with the sort of experience they’ve come to expect from the majors.
“This presents a genuine opportunity for these smaller centres to reposition their offering for growth – we’re already seeing this happen in Queensland and New South Wales on our projects like Yamanto Central, Big Top, Springfield Fair, Highfields Village and Mercato on Byron.”
Major regionals like Chermside, Indooroopilly and Pacific Fair make up just 9 per cent of the total retail floorspace in Queensland, while neighbourhood and subregional centres make up 73 per cent of centres across the state.
Mr Andersen said many commentators often ignore huge portions of the retail market.
“People focus on the major and super regionals, and there’s a lot of pessimism in that space.
“The opportunities available to landlords of subregionals and neighbourhood centres to update their offerings and rethink their tenancy mix for growth are abundant.
“Smaller centres can learn from the successes of the majors in expanding their food and beverage and entertainment offerings.
“But in order to compete, many will also need to reposition, bringing the quality of their assets in line with the major regionals.
“Across metropolitan regions, many people have to travel upwards of 30 minutes to get to a major retail centre.
“Smaller centres have the opportunity to develop tailored offerings which suit their communities and offer significantly greater convenience than major regional centres.
“There are so many future opportunities for retail centres – uses which mix residential, commercial, hotel and retirement offerings provide significant growth avenues, and we are working with a number of our retail clients to unlock their commercial value.”
DMA Partners will be running a seminar/workshop series over the next few months to delve deeper into the opportunity for these local shopping centre assets. Contact DMA if you wish to participate at firstname.lastname@example.org.