By Ian Shimmin | 7 May 2018

Shopping centres around the world are incorporating health and wellness uses into their tenant mix, as they add value and bring beneficial synergies.

In the latest International Council of Shopping Centers’ (ICSC) Industry Insights Series, Urbis Director Ian Shimmin examines shopping and expenditure patterns in Australia, particularly cross-shopping, and the implications for centre layout and tenant mix strategies. It also shows why incorporating health and well-being into the programming and design of retail environments makes commercial sense, even if the return on investment is not immediately apparent.

Health and Wellness uses attract people to shopping centres during quieter periods for traditional retailers.

The retail property sector is facing a challenging environment. As shopping centres continue to evolve from enclosed big-box retail destinations to broadly based mixed-use space, prudent landlords regularly re-evaluate their tenant mix plans and offerings to remain relevant. Against this backdrop, health and wellness (H&W)—consisting largely of hospitals and day surgeries, medical and allied health services, and wellness uses, activities and other well-being drivers—has emerged as an important component in the mix of uses for shopping centres of all sizes to consider. The evidence from Australia is compelling.

The introduction of H&W uses and spaces—from major facilities such as hospitals and gyms to simple areas for Pilates classes—is an increasingly popular global trend involving extending dwell times, adding destination appeal, creating mutually beneficial synergies between uses, and sustaining a higher level of “quality income,” both directly and indirectly. In Australia, for example, over the last three years, 60% of shopping centres have increased their formal H&W floorspace and are focusing more on creating informal spaces.

  • The amount of space allocated to formal health and wellness (H&W) uses has increased in 60% of centres across Australia over the
    last three years.
  • Shopping Centre Type Expenditure (SCTE) accounts for around 61% of all electronic card (i.e., most credit and debit card) spending
    in Australia, with H&W-related consumer spending around 7.0% of SCTE.
  • H&W uses to attract people to shopping centres during quieter periods for traditional retailers. Card data shows that 46% of H&W
    spending occurs between 8am and 1pm, compared with 33% of retail spending for the same period.
  • In Australia, average retail spending at shopping centres equates to $104 per visit but jumps to $123 (an increase of 18%) on the day
    of an H&W transaction.
  • On average, approximately 4% of specialty space is occupied by formal H&W uses across all Australian shopping centres.
  • There are very clear synergies between formal H&W uses and some shopping centre tenant types, with H&W customers directing a higher percentage of spend to pharmacies, services, fashion, department and discount department stores, and supermarkets.
  • H&W data is challenging to capture. Existing tenant classification systems are one issue but variation in Australian government
    rebates and turnover reporting complicate matters further.
  • Targeted research is required into the importance of general well-being drivers to the performance of shopping centres.


The above is a snippet from the original article published by ICSC.  Read the full article here.