Struggling European retailers could take a leaf out of Australia’s book. The retail market is buoyant and footfall is up, Lachlan Macgillivray, Head of Retail Investment, Australia, Colliers International, told Real Estate Day at MIPIM.
The two markets have some similarities and some differences.
One key trend has made a difference in both markets: ‘We are seeing a lot of Food & Beverage and entertainment-lead retail development at the moment,’ he said. ‘It is about re-inventing shopping centres, making them more relevant and promoting repeat visits from your catchment area’.
Statistics show the change: ten years ago, the percentage of F&B was 5-10% of gross floor space in shopping centres, while now it is 30-40%, so ‘there has definitely been an evolution’, Macgillivray said. ‘We saw that trend emerging in Asia first, in Singapore and Hong Kong in particular’.
Asia is a good place to learn from, he said, because they are good at re-inventing themselves: ‘They do it better in Asia than anywhere else because they have land constraints and it is worth looking at some of those multi-purpose developments there that have got hotels, office, residential, retail, even hospitals and international universities.’
Another clear trend in shopping centres is for carving up the space into smaller units. Where once there was a big department store, now ‘we bring in mini majors who want smaller portions of space but pay more per square foot than for a big space, they have a high turnover and they bring new customers in who were not coming previously,’ Macgillivray said. ‘It is all about driving repeat visits’.
Catchment sizes is what really makes the difference between the UK market and Australia’s. ‘If you look at a £1 bn turnover shopping centre in the two countries, Westfield London has a catchment area of 3.6 mln people, while Westfield Bondo Australia has the same turnover, but a catchment area of 450,000 people’, he said.
Australian shopping centres are getting a lot more repeat visits from their customers, who are making the trip one or two times a week, rather that once every two or three weeks like in the UK.
Part of the reason is down to inescapable social, cultural and geographical differences. London is urban while Australia has a more suburban landscape, he said, but part of the reason is that shopping centres in Australia are supermarket-anchored, which encourages frequent visits.
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