Homegrown pop-ups – diversifying Adelaide’s CBD retail sceneAugust 21, 2015 / By
A quiet April wander through one of Adelaide’s lesser known and largely vacant shopping arcades, ‘Topham Mall’, left me questioning where the opportunities lie for both landlords and small businesses in the current retail environment.
Four months later, a similar walk-through revealed significant change, Topham Mall had been transformed with pop-up tenancies, and it was thriving! Whilst deciding whether to line up at The Beigelry for some breakfast or get a coffee from Booknook & Bean, I began thinking about pop-up retailers; not only their appeal to young retail entrepreneurs, or to landlords trying to fill vacancies, but also the broader positive impact these initiatives have on Adelaide’s retail scene.
A period of challenging trade conditions saw Adelaide’s CBD retail vacancy climb to its highest level in over a decade in mid-2014 (JLL Research). While the recovery in South Australia’s retail turnover growth over the past 12 months has not yet been reflected in a significant improvement in leasing fundamentals, CBD vacancy has tightened, due mainly to the rise of these short-term tenancies.
A major driver in the growth of pop-up retailing is Renew Adelaide, a government backed initiative working with local property owners, offering short-term rent-free agreements to entrepreneurs, with the aim of ‘keeping empty spaces active, encouraging foot traffic in urban areas and creating a vibrant city – both socially and economically’. Renew Adelaide currently has 13 activated shop locations across the CBD, with a further 3-4 vacancies to be filled in the creation of a local fashion hub in Adelaide Central Plaza.
For the city itself, homegrown start-ups provide an opportunity for creative and unique retail offerings in a market dominated by national operators. The prospect of a CBD retail market with strong local presence is exciting, not only for consumers, but also to SA as a whole. In a state with well documented unemployment, the initiative provides a positive opening for local investment and job creation.
While these short term options may not translate to an immediate cash flow for landlords, the utilisation of pop-up tenancies to reactivate and reinvigorate underused space can only be of benefit. These new retail offerings, which are often niche product lines, improve tired retail areas both visually through creative store-fronts as well as boosting ‘destination’ foot traffic. This, in turn, supports existing tenants’ trade and increases awareness of the asset for potential new tenants.
The challenge for landlords lies in the ability of these operators to prosper through the Renew Adelaide model and evolve to long-standing rent paying tenants. To appreciate the long-term potential of the initiative, we only need to look at the reactivation of Regent Arcade. A struggling off-sider to Adelaide’s major strip, Rundle Mall, the arcade received eight Renew Adelaide tenancies, improving occupancy and creating a destination for local fashion and giftware. Five of these retailers have now converted to commercial leases – a win for both the landlord and start-up entrepreneurs.
With retail spending trends expected to be positively impacted by high-density residential CBD development and forecast population growth in coming years, an exciting opportunity exists for a significant number of these local operators to become a permanent fixture of Adelaide’s CBD retail scene.
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