Convenience in commercial property trends

06-Aug-2018 16:10:07

Are neighbourhood centres/small strip retail still a place to invest? There is little doubt it is a very attractive asset class, often sitting in the pricing “sweet spot” for a broad range of investors. Much of the equation may lie in who is the cornerstone tenant underpinning the property.


Convenience Stores still in vogue?

Are investors banking on the power of convenience stores to continue to draw foot traffic even while big box stores and shopping centres struggle to attract? In fact, convenience operations in many areas are expanding.

Neighbourhood shopping centre sales in NSW jumped 80 per cent in the year to June 30 compounded further by the fact that value of total sales has also shown a sharp increase of 23 %.

Trends to watch

At first, supermarkets and other big-name retailers trembled at the thought of competing with online giants. Now, many brick-and-mortar retailers can withstand the onslaught coming from online retailers by playing on e-commerce’s turf in a move to more online services.

In the USA companies such as Kroger and Walmart lead in delivery and BOPIS (Buy Online, Pick Up In Store) options, and in Australia the click and collect concept continues to grow. Here are 3 other top trends:

#1 Steady numbers for grocery sales

People buy a lot of things online, but when it comes to groceries, those sales account for less than 10% of all online sales.

#2 Local growers connecting

Opportunities abound for local grocers seizing on demographic trends. Increased demand for farm fresh and organic foods is providing an edge for those stores that team up with local growers.

#3: Food and dining replace retail

Clothing and nail boutiques are being replaced by unique restaurants and foodies in centres with grocery supermarkets. Shoppers in the mood for food have choices and can turn their weekly chores of the grocery list into a social or leisure opportunity.

Food and basic consumables

We like to see, touch and smell many of the fresh items we consume. Despite how busy we all are, most of us will find the time if we have something that offers the convenience. Despite so many household name businesses closing recently, grocery anchor stores have proven extraordinarily resilient.

Shoppers tend to stop by their local store at least once a week. If there is a florist, beauty spa, clothing store or even restaurant there, it’s likely they will benefit from overflow. That’s good business for all.





Research source

NAI Harcourts, Commercial Property, Newsletter, NAI Market Leader