The face of the local shopping is changing. Anyone walking down Chapel St, Melbourne’s most celebrated retail strip, will notice – the fashion boutiques are closing. With over 40 vacant commercial properties available for lease on Chapel St right now, one could be forgiven for thinking that nobody buys clothing anymore.
But that simply isn’t true. The fashionistas have simply moved to online shopping.
The same is true of other local shopping strips all over Melbourne. Boutique clothing stores, shoe shops, manchester and professional services companies are all disappearing.
And as one commercial door closes, another one opens.
A new wave of health and fitness brands is springing up all over Melbourne and the opportuity is ripe for landlords to capitalise on this new trend. Gyms, yoga studios and massage centres are well represented in the health and fitness category while retaurants, cafes and takeaways have become ever more plentiful in the food market.
But this isn’t just a Melbourne trend, this is worldwide.
In the US, according to data firm CoStar Group, the amount of commercial space leased by fitness centres and gyms in traditional shopping malls and retail strips grew by approx. 69% nationwide over the past five years. That’s huge! And we’re seeing exactly the same trend in Australia.
Interestingly, it’s not the ‘big box’ gyms that are absorbing the empty commercial space. Health and fitness businesses with a very specific offering seem to be working best overseas, like Orangetheory Fitness, a national heart rate training chain in the US that focuses on quick in-and-out classes.
Back in Australia, while bricks and mortar discount retailers like Chemist Warehouse are still strong attractors, smart landlords are seeking to attract ‘internet-resistant’ businesses. The future of retail means a lot less local in-person shopping and a lot more eating and sweating.
So what should investors look out for? Well, as always in the property market, it’s all about location. Strategically placed, retail strips near high-income residential neighbourhoods and heavily trafficked business corridors looks like the winning formula if the trends overseas hold true.
Need advice? Talk to the experts at HKC Property Consultants. We’re happy to prepare a strategy for your next lease or help you find a new premises to invest in. Call now 0404 398 663.