Across Australia, there are hundreds of small to medium size shopping centres that have relied on the fact that tough planning restrictions have prevented completion of a newer facility opening down the street, or around the corner.
This has shielded many from the cold winds of competition in the past, but it will no longer continue to do so.. Increasingly, older style shopping centres are prone to losing their traditional customer base as demographics shift. They are also losing their retail tenants as the whole retail economy changes due to technology.
Rather than lamenting this as a cause for dismay, I see incredible opportunity for small and mid-size centres to reinvent their community connection and restore their commercial relevance. Doing so means approaching the shopping centre with a fresh set of eyes and understanding that its future use may not simply be a modernised version of what it once was, but something with expanded appeal for different users.
Many of these smaller centres have been held by private owners over long periods of time. Lacking the benefit of an active, professional management and recapitalisation plan such as many institutions provide, many have begun to languish. Retail formats have grown tired. Even anchor tenants may have shown little interest in refreshing their store formats, further diminishing the overall appeal.
However, many are also occupying prime positions, near transport interchanges or commercial centres. By virtue of their age, they were typically developed on ‘greenfield’ sites some 20, 30 or even 40 years ago. Residential and other forms of development have since filled in the surrounding urban fabric, enhancing the potential of the land.
Exploiting this potential is something more and more private owners are beginning to explore. Experience show us that the smart ones are looking beyond a ‘retail only’ format and thinking about a range of options for redevelopment or expansion as part of rejuvenating the centre’s appeal and relevance.
The options that can be canvassed are many, and only some will be relevant to particular sites based on their location and economic catchment, but changes in town planning restrictions in many local government jurisdictions mean the options have opened up.
Here are a few options worth considering:
High density retirement living can be developed on an existing retail site by building over a portion of the existing centre or making use of some of its open at-grade car parking space.
There are issues around providing separate entries to the retail and residential elements, and there are constraints to be considered in terms of the impact of strata regarding the residential which need to be factored in, but the demand for housing in close proximity to retail, which can also mean close proximity to services like chemists, doctors, and to things like ease of transport, is significant and often worth exploring.
This is particularly pertinent to centres near tertiary institutions or which offer ready transit options to those institutions. Student accommodation doesn’t need to bring the problems of strata ownership. Plus, student accommodation operates at much higher density than other forms of housing, and having students as immediate customers of the retail component can be a big asset to retail turnover.
Suburban or decentralised offices in most Australian cities don’t typically have a great reputation for quality design, but this doesn’t mean centres in certain locations can’t offer a component of their floorspace as high grade office space. There is a rising trend for centres to be used as a ‘third place’ where people meet and giving office tenants access to a mix of retail and dining opportunities can be an appealing dynamic.
You don’t have to own a super-regional centre to consider entertainment options as a viable part of the mix. Smaller cinemas are leading a way forward in a multitude of suburban locations, and can bring a strong night time economy to restaurant and similar businesses. Modern gymnasiums are bordering on entertainment in the way they are being run and can also generate substantial volumes of evening or weekend traffic.
Fresh food and more fresh food
Within the retail mix itself, the emphasis is more and more on fresh, diverse and high-quality food offerings. Some centres can reposition themselves entirely around quality fresh food and produce provided the catchment demographics support it. Markets and casual lettings can enhance this offering to the wider community rather than posing extra competition for permanent tenants.
The days of council libraries or other community resources being located in stand-alone locations are coming to an end. Today’s modern library is a community hub and many are integrating themselves into shopping centres. There have even been examples where library sites have been redeveloped as a shopping centre with the library taking a tenancy on good terms within the centre as part of the deal.
Every centre is different and requires a different approach but the options for centres currently underperforming in terms of their community and commercial appeal have not diminished – they have expanded. This can mean an exciting aspect of urban renewal as centres in key locations reinvent their role and move beyond the ‘retail only’ format of the past.
This artical appeared in sourceable 16/04/15 https://sourceable.net/retail-ripe-for-renewal/#