The growth in the “experiential“ tenant is keeping shopping centres alive, but it follows that there are some changes to accommodate them.
The Property Council New Zealand recently reported in feedback they had received from Shopping Centre owners, that as a group, they were “generally doing well” in 2022 and that they now know there needs to be a change in the focus of their offering. Consumers are seeking to dine, be entertained, work out in a group environment (and in many cases, combine the activities) *Source – The Property Council New Zealand, October 2022. e.g., the new Westfield Mall in Newmarket, Chartwell in Hamilton, Queensgate in Wellington and Merivale Mall in Christchurch.
For many chain retailers this has been helpful in them navigating turbulent conditions, but equally so it has been hard for many smaller and independent ones, who have fallen by the wayside.
An interesting phenomenon is in the luxury goods market. Larger departmental stores are seeing a consistent decline in the lux brands, who are opting to exit and establish their own footprint. This direct sell to consumer has enabled them to protect their premium price point by diminishing their exposure to the departmental “sales seasons.” Australasian examples of this are already apparent, and many commercial real estate operators are successfully placing “name brand” stores in infill sites across centres, and more prominent high street locations.
The appeal of being a single brand destination is that the retailer can control sales event cycles, protecting brand margins and value, and they can also engender greater brand loyalty by meeting the client with a personalized brand experience.
Overall, these trends allow creative lessors and agents to attract big names to premises that can work with brand elevation strategies.
Are you looking for innovation in filling your vacant premises? Talk to your local NAI Harcourts sales consultant about leasing strategies, and our ongoing asset management services.
Credit: NAI Harcourts, CRE market update, October 2022.