Urban-planning firm Urbis says the ‘super-neighbourhood centres’ of the future will “significantly outperform market benchmarks in terms of financial performance”.
Urbis National Director Matthew Cleary says these centres, with their mixed uses and high-quality design, will increasingly resonate with investors.
“Our analysis of the emerging super-neighbourhood category shows these centres have the capacity to deliver higher in-store sales through longer and more stable shopping patterns, in turn supporting higher rental growth, which, in turn, drives value,” Mr Cleary said.
“We tested the hypothesis by analysing historical transactions of centres with just some of the characteristics of super neighbourhoods. A comparison of equivalent yields … found that, in nearly all instances, centres aligned to the super-neighbourhood concept sold at a premium to the benchmark.
“Targeted with the right mix, the super-neighbourhood concept has the capacity to attract not only passing shoppers. It will also command local trade through being a focal point for meeting the needs for its surrounding population.
“Catering to many everyday human needs means super-neighbourhood centres embrace longer and more expanded trading hours to achieve more consistent trade throughout the day – and create greater levels of cross-shop opportunities.”
This is part of the rationale driving Frasers Property Australia’s current pipeline of super-neighbourhood centres. Examples include Burwood Brickworks shopping centre in Melbourne and the Ed.Square town centre in Sydney.
Changing social patterns
According to Urbis, there’s growing recognition that shopping centres will perform a broader social role in the future.
Changes in social patterns, work flexibility and smaller inner-urban households are some of the drivers of this change.
“As the pace of change in technology and society ramps up, traditional retail spaces and formats are falling behind, unable to adapt, and unable to meet the modern demands of our retail environment,” Mr Cleary said.
“Super-neighbourhood centres can bring us back together in a modern town square or market place to meet demand for a real and engaging place.”