Q&A with David Mark
Burgess Rawson partner and head of leasing David Mark sat down with us to discuss top trends for the leasing market as we look towards 2022.
Q. How has the pandemic transformed the leasing market?
A. “The impact on the retail leasing sector has been significant as footfall becomes obsolete in some states around Australia. Technology was pushed to the forefront as e-commerce become an essential part of retail globally. Companies were forced to innovate or become redundant in the highly competitive online retail space. With restrictions now being eased and businesses opening in each of the states, there is a visible increase in momentum for retail leasing deals as we head into 2022.”
Q. What do you see as the top leasing trends for the coming year?
A. Regional is the new urban
As more businesses embrace a hybrid working model (combination of onsite and remote working), this has created a regional real-estate boom with consumers relocating to regional areas, called “push to the bush”. A greater focus on lifestyle, the home and space has inspired a rise in consumers moving to regional areas to achieve their slice of the great Australian dream. With the demographics of regional areas changing, large format retailers are recognising this opportunity and have expanded their bricks and mortar footprint to these in-demand locations.
Our leasing and asset management data reveals a shift to local shopping precincts brought on by COVID-19. This increase in local demand for service and convenience has driven innovations in planning and designing centres. Consumers now want to live, work and buy local.
Within these local centres are a diverse mix of stores and services such as swimming schools, gymnasiums, health food, medical services, and speciality stores. The addition of outdoor dining precincts and flexible outdoor areas for weekend farmers markets and community events are also becoming more common place.
Essential services are booming
Demand for liquor, supermarket, pharmacy, fuel, childcare, and government investment has accelerated over the past 12 months. As consumers adjusted to increased lockdown measures, home improvement and localised shopping experiences created a thriving trade for retailers.
Pet and DIY hardware stores are delivering strong growth and income opportunities. For example, Bunnings’ revenue for FY20/21 rose 12.5% to $16.9 billion.
Retailers are focusing on sustainability initiatives to reduce the negative impact of their business on people and the environment. By incorporating energy saving technologies such as charging points for electric vehicles, solar panels integrated with car park shade sail structures, leveraging natural light, and using sustainably sourced building materials, businesses are incorporating sustainability into their business models.
“As we move into a post-pandemic world, retailers will need to remain agile to meet the demands of consumers and their changing needs. Whether that is implementing a new workplace model, upgrading out of date technology, or expanding to new sectors, business that meet their consumers demands will continue to thrive.”