Activity in the neighbourhood and regional shopping centre sector is challenging but it’s far from doom and gloom if landlords embrace changing retail trends.
A neighbourhood centre typically includes at least one supermarket as the primary anchor tenant, as well as smaller tenants. Robin Brenchley, Director of Retail Leasing, Raine & Horne Retail Services, explains, “Currently neighbourhood centres are being affected by a shortage of franchisees.
“There is a shortage of demand from franchisees because the banks are applying stricter lending criterion to them.”
Robin’s business partner, Gary Quig, Director, Retail Property Management, at Retail Services, says the dearth of franchisees is compounded by the decision by some large franchisors such as the Noni B Group, which owns outlets such as Rockmans, Table Eight, Crossroads, and Liz Jordan to move to larger, sub-regional centres. At the same time, some food chains are also reviewing their neighbourhood centre positions, with most preferring to stay put.
To contend with the exodus of some major franchise outlets, Gary and Robin are urging shopping centre owners to ‘remix’ the composition of their tenants. “In some cases, it’s time to wave goodbye to fashion, and now owners need to open their centres to independent food and beverage outlets, services firms and allied health practices,” Gary says.
The benefits of doing business from a neighbourhood centre, maintains Robin, include convenience, free parking for consumers, and a developing range of services. “Moreover, many people visit their local shopping centre 3 or 4 times a week, which is great news for tenants. Don’t forget the big anchor tenants such as Coles, Woolworths, and Aldi aren’t going anywhere.
Gary concludes, “The key message for landlords is that remixing is the current trend.”
To find out more about the market for neighbourhood and regional shopping centres in NSW, contact Raine & Horne Retail Services on 02 8299 7200.