A new report has highlighted how the growth of online shopping could change the retail property landscape in the future.
The report, by CBRE, shows that as a result of e-commerce sites like Amazon booming during the pandemic, once bustling shopping precincts have turned into ghost towns.
Findings show that due to the face that CBD and regional shopping centres have the highest amount of apparel selling space, they are set to be impacted the most by the shrinking shopper demand.
However, it is not all doom and gloom, with experts suggesting ways that commercial assets can still flourish in the changing landscape.
CBRE’s Regional Director of Retail Services, Meagan Wakefield, said that the introduction of mixed-use offerings in retail settings could be one way to create extra revenue for commercial landlords.
Incorporating mixed-use into a precinct can help drive spending with office and education offerings providing the greatest increase in centre MAT (Moving Annual Total) growth.CBRE Regional Director of Retail Services – Meagan Wakefield
Another idea to adapt to the evolving retail terrain is to take advantage of the growing influence of online shopping by strategically reconfiguring retail spaces by introducing e-commerce distribution centres.
Our analysis shows that discount department stores in centres that had a catchment with a higher population density, younger population and higher average household income were more resilient and less likely to close as part of network optimisation projects.CBRE Regional Director of Retail Services – Meagan Wakefield
The report also showed how retail assets will outperform rival sectors such as office and industrial.
Kate Bailey, Head of Retail Research at CBRE, said: “COVID-19 has also driven the increase in online retail penetration sharply to an estimated 13.3%, a number originally not expected to be reached until 2024, and we’re now expecting to see department store selling space decrease to 2.6% annually by the end of the same year – the largest forecast decline of all retail categories.”
“Conversely, grocery stores are slated to see the strongest growth, followed by health and beauty, while home furnishing stores are forecast to record the strongest growth in floor space.”