14 Nov 2017

Shopping centre lettable areas and use designations are evolving in line with the changing nature of retail and the way we live, work and play.

Shopping centres have always been social destinations. From the opening of the first modern shopping centre in Australia in 1957, described by a local newspaper as “an island of retailing in a lake of car parking”, shopping centres have evolved in line with changing environments and consumer behaviour. 

The retail sector is facing strong headwinds in the changing Australian retailing environment and shopping centre owners need to re-evaluate their tenancy configurations and offerings to defend against disruptions.

Regional and sub-regional shopping centre GLA is being reallocated to innovative new uses as retailers need less physical stores to service the markets in which they operate.

Department stores Myer and David Jones are facing strong competition in Australia as e-commence retailing grows and international retailers, including Zara, H&M, Sephora and Uniqlo open stores across the country.

As shopping centres evolve, they are increasingly becoming public spaces for their communities.

More recently, UK department store Debenhams made its debut in Australia with the opening of a new store in Melbourne’s CBD in October. The small format department store is located within the St Collins Lane development and its format differs from traditional department stores Myer and David Jones, with a smaller store area of 3,000sqm and significantly smaller area than the average UK store size of approximately 7,000sqm.

Retailers and owners are responding to the changing retailing climate by reducing traditional department store footprints and introducing in store experiences like style suites, beauty rooms and cafes. Upon completion, the redevelopment of Vicinity’s The Glen in Melbourne’s south east will see David Jones reduce their tenancy area, whilst the redevelopment of QIC’s Eastland in Melbourne’s east introduced a small format David Jones with an area of 11,000sqm, predominantly focusing on fashion and beauty products.

Owners are allocating more space to community and event uses, replacing traditional kiosk and dead mall space with themed spaces creating an immersive and extended customer experience, curating truly ‘free’ community spaces to interact with friends and family. Owners are also evolving new revenue streams and remodelling traditional revenue streams to complement existing retail, increase dwell times and drive incremental sales.

As shopping centres evolve, they are increasingly becoming public spaces for their communities. The curation of truly ‘free’ spaces within shopping centres is replicating public spaces where people can stop, relax, meet and do activities…

See the full article on Estelle’s LinkedIn