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If you’re considering acquiring a retail property anytime soon, be aware the market is shifting, and investors and owner occupiers will do well to act quickly, writes Vincent West, Director, Raine & Horne Commercial Northern Beaches.

With the growth of online retailing some businesses no longer require brick and mortar addresses. However, like any marketplace, when one door closes another opens. In this case, gyms, yoga, and Pilates studios are increasingly occupying strip retail outlets on the Northern Beaches. More residents are seeking additional ways to stay healthy, and the region’s collective health kick is fuelling demand from gyms and other fitness industry providers for retail space.

Retail is an exciting property class

Owning a Northern Beaches retail asset makes for an interesting investmen. Values may fluctuate dramatically from one side of a street to the other depending on the levels of foot traffic.

Take the legendary Manly Corso. On the southern side of the Corso, owners can achieve higher rents and are more likely to attract a long-term tenant than retailers located on the northern side. The south-north divide can be explained along seasonal lines. In winter, retail space on the Corso’s southern side receives more sunlight. The extra sunbeams duly attract more natural footfall from local shoppers and tourists strolling between the wharf and Manly Beach than businesses located along the north side of the famous walkway.

Likewise, the new permanent 24-hour bus lane on Pittwater Road, Dee Why, as part of ongoing upgrades to infrastructure for the B-Line, will potentially impact strip retail along our region’s busiest thoroughfare.

That said, there is a possibility smaller professional service firms that don’t require significant foot traffic will start to compete with retailers for strip space in our region. The level of demand from solicitors or accountants for strip space will depend on the lease amounts these businesses will pay.  The first floor of an office building will generally be more affordable than strip retail space. Whether smaller services firm plunge into strip retail or not will depend on whether they require a level of footfall business or the street level exposure.

If you’re considering selling your business location or retail property investment, be sure to give Raine & Horne Commercial Northern Beaches a call on (02) 9971 9000 to discuss your options.