Retail Market Breakdown - 23rd August 2018
Welcome to Tenant Leasing Group’s breakdown of the retail market for August 2018!
This month we’ve looked at how the makeup of shopping centre retail continues to change, third party food delivery apps and implications for restaurants, an infrastructure-heavy budget in NSW, Amazon’s continued expansion in Australia and exciting times in Large Format.
It’s a quick industry news summary that we hope is relevant & useful.
Vicinity to shake up retail ownership landscape
The country’s biggest mall landlord, Vicinity Centres, is embarking on further asset sales and the launch of its $1 billion wholesale joint-venture fund with Keppel Capital. The sales will change the focus of Vicinity to about 50 ”flagship” centres, worth about $14 billion, while allowing a swath of new owners to rejuvenate the neighbourhood malls to cater for their own catchment areas. Peri Macdonald, executive general manager retail for Frasers Property Australia, makes clear the ongoing shift in shopping centre retail: “Population growth and increased density in inner-city catchments are giving rise to greater demand for new forms of convenience retail…This growth reveals a distinct opportunity for the emerging super-neighbourhood class of shopping centre, which mirrors the locally curated tenancy mix of neighbourhood centres on a size scale similar to sub-regional centres.” Read the full article (4 mins).
5 Steps to Turn Your Restaurant into an Advanced Distribution Centre
Increasingly, third party food delivery services are a consideration for restaurateurs, and how their site space is laid out and managed. Recent research shows that Australians are spending $2.6 billion each year on food and drink delivery through companies such as Menulog, UberEats, Deliveroo and Foodora. It’s a huge trend and it isn’t going anywhere fast. And while it’s not for everyone, if your restaurant business does decide to go the third party delivery route, there are 5 key factors you ought to consider to ensure a good balance of online ordering and your in-house dining experience. Read the full article (8 mins).
$87.2 billion for new infrastructure projects in NSW
The NSW Government 2018 Budget commits $87.2 billion to new infrastructure projects. Commenting on transport and other infrastructure development to support families and business, Treasurer Dominic Perrottet said “Strong fiscal management and our asset recycling plan have made it possible to restore our infrastructure to world-class standards”. Cost of living relief, unprecedented school investment and record hospital funding are other centerpieces of the 2018-19 NSW Budget, while the government continues to deliver consistent surpluses and growth in the value of public net assets. Preschool education, apprenticeships and registration rebates for toll-users are other areas receiving support, and in turn improving conditions for consumers. Read the full article (5 mins).
Amazon unveils new Sydney fulfilment centre almost double the size of Melbourne one
Amazon continues it’s aggressive roll-out via the opening of a new 43,000 square metre fulfilment centre in Moorebank, Sydney, on Wednesday the 15th of August. The massive warehouse will improve shipping capabilities and provide better logistics services for both SMEs selling on the platform and consumers – bringing their total number of fulfilment centres in Australia up to two (the first being based in Dandenong, Victoria). Amazon’s longevity, competition with eBay and impacts for the wider retail community remain complex and uncertain, but it’s clear they’re going for it. Read the full article (4 mins).
National Large Format retail report released
The large format retail sector is evolving on the back of changing consumer preferences, increased competition and planning changes, according to a report released earlier this month by M3 Property. The trends emerging from these conditions are: a changing retail mix and the growth of large format lifestyle centres. In turn this is helping drive continued demand for space and falling vacancy in most states. The retail planning changes have provided retailers greater flexibility, allowing them to take-up space in large format retail centres. These centres offer lower rents, greater convenience for customers and opportunities to expand into new markets. With the demand for household good rising due to increasing populations, residential developments and low interest rates, the sector remains strong. Read the full report (10 pages).
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