Cbd to Central Shopping Disctrict a Blueprint for the Perth Cbd Retail Property Market for the Next Decade
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Y RESEARCH THOUGHT LEADERSHIP CBD TO CENTRAL SHOPPING DISCTRICT A BLUEPRINT FOR THE PERTH CBD RETAIL PROPERTY MARKET FOR THE NEXT DECADE NOVEMBER 2017 To discuss this Thought Leadership study or any Y Research Report further, please contact: Mr Damian Stone Chief Problem Solver Y Research – Independent Commercial Property Information and Research M 0433 525 414 E [email protected] A PO Box 683, Applecross WA 6153 linkedin.com/in/damianstone Twitter: @YResearchNews Y RESEARCH UNIQUE DATA, UNIQUE INSIGHTS, YOU NEED ABOUT Y RESEARCH Y Research is an independent Western Australian property information and research firm. Since its inception in 2010, Y Research has developed unique databases on Perth’s office, retail, apartment, tourism, industrial and regional property markets through on the ground property inspections. We believe that for data accuracy, there is no better substitute than looking at a property in person. Our databases are supported by a wide variety of industry sources and extensive monitoring of the West Australian commercial property markets. Y Research produces a series of regular reports on Western Australia’s office, retail, industrial, apartment and tourism markets, as well as providing consultancy and advisory services to a range of Government and private clients. Y Research aims to provide high quality and more useful information to our clients, ensuring that they are better equipped to make decisions regarding their business. DISCLAIMER The information contained in this report has been prepared with care by Y Research and may include information from apparently reliable secondary data sources and which the author have relied on for completeness and accuracy. However, Y Research offers no warranty that the information it contains is accurate and disclaims all liability for any losses, damages, costs or expenses suffered by any person as a result of any reliance on this information. Accordingly, all interested parties should make their own enquiries to verify the information and it is the responsibility of interested parties to satisfy themselves in all respects. No part of this document should be construed as investment advice, either in relation to the real estate sector or a particular transaction. Information in this publication has been obtained from a number of sources outlined in the report. Y Research does not guarantee its accuracy or completeness and disclaims any responsibility for loss of damage whatsoever arising in any way for any representation, act or omission, whether expressed or implied (including responsibility to any person by reason of negligence). Opinions and estimates constitute judgements, which change when circumstances change, if not before. © Copyright 2017 Y Research Pty Ltd ABN 44 146 744 434. All rights reserved. No part of this publication may be reproduced or retransmitted in any form or by any means electronic, mechanical, photocopying, recording, or otherwise without the prior permission of the author. CBD To Central Shopping Disctrict - November 2017 2 REDISCOVERING WHAT MAKES SHOPPING IN OUR CBD SPECIAL The state of the Perth CBD retail market has been a topic of conversation for the last couple of years around Government workshops, the media and family dinner tables. These discussions have highlighted many issues for the current state of CBD shops - the cost and availability of parking, the economic downturn, fewer office workers, the impact of major construction and more. On the flip side, there have been many suggestions made - make parking free, redevelop older centres, add pop up shops, more festivals and events and more. What these discussions have largely ignored is that the current market conditions in the Perth CBD are a result of long term structural change to the Perth retail property market. The Perth CBD’s role as WA’s retail destination has been diminishing for over 50 years. Shopping in the CBD used to be special. A generation ago, day trips into the CBD for shopping and entertainment, although not a regular occurrence, were memorable. My mother can recall trips into the Perth CBD to shop with my grandparents to visit Boans or Aherns, to watch a movie at the Piccadilly and have a toasted sandwich for lunch at the Forum or Boans Cafeteria. She can even recall as a very, very young child (she would like this stressed as she tends to be delicate about her age!) riding on trams in the Perth CBD and via trains with personal compartments. While shopping was a reason for the trip, it was not what made them memorable. Trips to the city were about more than just visiting the shops. It was the travel in, walking through the malls and seeing or trying things not available elsewhere. It was these experiences that have stayed with Western Australians long after the items they purchased, and the stores where they purchased these items, have disappeared from Perth’s retail landscape. In the modern era, with suburban shopping centres and the internet which allows us to order practically anything from anywhere, how can we make a trip into the CBD special again? CBD To Central Shopping Disctrict - November 2017 3 UNDERSTAND THE COMPARATIVE CREATING A POINT OF DIFFERENCE CBD RETAIL OFFER WITH SUBURBAN SHOPPING CENTRES Within the CBD’s major retail complexes, there is approximately 135,000 sq m of retail space. These centres contain slightly less The advent of suburban shopping centres in the 1960s and 70s, than half of the 900 specialty stores operating in the Perth CBD, with advanced offerings like air-conditioning and car parking, according to the City of Perth. slowly eroded the primacy of the Perth CBD. You didn’t need to visit the city to go to the movies or a department store. As retail Key features of the CBD retail property market include: two has evolved, there are very few things that you can only get in the Department stores, a discount department store, international CBD. The extension of Sunday Trading outside the CBD in 2012 retailers, such as H+M, Zara, Williams Sonoma and the Apple eliminated the city’s competitive advantage. shop, four supermarkets (including a small IGA), currently no cinemas and a myriad of food + beverage and fashion offerings. Since this time, the CBD has largely failed to articulate why people should choose to visit the city over suburban centres. Including the retail space outside of the main retail complexes, This problem will escalate over the next 5-10 years as the Perth CBD retail property market is comparable in size WA’s suburban shopping centres undergo a once in 25 year to the combined areas of Lakeside Joondalup and Carousel redevelopment boom. According to Y Research’s May 2017 shopping centre in Cannington. In these two centres there are Metropolitan Perth Shopping Centre Development Report, two Department stores, 5 discount departments stores, limited 49 projects, a mix of expansion to existing centres and new international retail (H+M at Joondalup), 6 supermarkets, two neighbourhood centres, are forecast to be completed between cinemas and over 500 specialty retailers. 2016 and 2020. By the end of the decade, these developments have the potential to add approximately 25.8% to metropolitan Foregoing the balance of Perth’s retail supply (shopping Perth shopping centre supply. centres, large format retail and main street), the difference between this select comparison is expanded offering in terms In total, these developments are worth an estimated $5.1 billion of supermarkets, discount department stores (people are dollars and will create nearly 50,000 jobs in their construction unlikely to go to the CBD to get a discount on whitegoods) and and operation. Upon completion, these centres will be home to cinema offerings. The CBD’s emerging point of difference is new supermarkets, department stores, discount department in international retailers but this advantage is being narrowed stores, international retailers and an estimated 1,480 additional by the planned redevelopment of Perth’s suburban shopping speciality retailers. centres. The bulk of development will come from the once in two What is clear from this analysis is that the CBD will never be decade expansion of Perth’s major shopping centres. The able to compete with suburban shopping centres on measures 2010 introduction of the Activity Centres Policy has facilitated like range of stores, parking or convenience of location. So how changing major regional centres from big retail boxes to can the CBD compete with suburban centres? community focal points encompassing a broader range of CBD To Central Shopping Disctrict - November 2017 4 uses. The wave of development will create entertainment hubs Scale - H+M occupy a 4,000 sq m store in the old GPO; in across Perth’s suburbs. No longer just food courts, centres will Joondalup they occupy a 2,200 sq m store. The city can evolve to establish dining precincts with top line restaurants and taverns. offer more flagship stores such as City Beach offering a fuller In limited examples, there is space planned for concerts. product range than smaller suburban stores. Refurbished and expanded cinemas are a key feature despite the rise of streaming services. New service based retailers will Uniqueness – there are already over 900 speciality stores in become main stays of larger regional centres. Gyms, childcare the CBD; many are unique offerings. The recently announced centres, medical centres and children’s playgrounds will create tenants of Yagan Square are a mix of successful food truck daily interaction in expanded centres. operators and hidden secrets from the suburbs expanding into the CBD. Stores at Yagan Square will have non-standard How can the CBD compete with the experiences offered by these offerings such as Hawaiian poke bowls, a speciality honey store centres in a location 5 -10 minutes from home? and an up-market deli.