For over a decade, the retail property sector globally has been the protagonist in a tale of paradoxes.
On the one hand, disruption at the hands of online retailing has left a wake of destruction for many retailers, centre owners and industries.
While on the other hand, entirely new industries and companies have exploded from obscurity to dominance in the space of a few years.
Amid all the churn, retailers and owners are increasingly positioning customer experience at the core of the product.
As the retail sector matures in the age of digital commerce, developer Frasers Property Australia is going back to the future to give birth to a new form of retail: the super-neighbourhood centre.
Frasers Property is leading the charge for the creation of a new asset class for retail property in Australia.
Driven by population growth and urban density, the super-neighbourhood centre brings together elements of conventional retail to inform a new model for a 21st century town centre.
Typically starting from 10,000sq m of gross lettable area (GLA) in size, the super-neighbourhood centre is smaller than major regional centres and roughly the same footprint as a sub-regional centre.
The tenancy mix is more akin to neighbourhood centres with a greater emphasis on local convenience and specialities, however with a higher priority on food and entertainment experiences.
Frasers Property general manager of retail leasing Tim Moore says super-neighbourhoods are a community-focused mix of local retailers, fresh food markets, essential services, dining and entertainment options.
But they are more than just a tenancy mix, they are a philosophy that is underpinned by an adventurous spirit of community-led development.
At the very core of the success of this new form of retail is a commitment to ensuring local communities have a sense of ownership in the creation and ongoing evolution of the centres.
Defined as the "social heart", this community engagement contributes to a better understanding of desired tenancy mix, catchment profiles and whether the mix will likely be successful from both a leasing and trading perspective.
Moore cites Frasers Property’s Burwood Brickworks development in Melbourne as an example of this approach.
“At Burwood, produce from the Urban Farm will provide opportunity for paddock to plate offers within the centre and promote food metres over food miles”.
The 12,700sq m shopping centre started construction in June 2018 and the aim is to create the most sustainable retail development in the world.
“There are few better examples of enabling the local community to help shape its super-neighbourhood centre than this,” Moore said.
The notion of risk taking or experimentation in retail leasing is not necessarily something that is encouraged in property.
Yet, according to Moore, it is at the core of the philosophy that underpins successful super-neighbourhood centres.
“Implicit in this scenario is the centre’s licence – and indeed its obligation – to experiment: with new leasing strategies, tenancy mixes, the flexibility of spaces and opportunities for new retail concepts,” he says.
In doing so, the centres act like a breeding ground for new retail concepts, including those that are spearheaded by local tenants with community support.
According to Moore, the developer’s Shell Cove project on the NSW south coast is proof of the value of this approach with almost every one of the 15 specialty stores and six restaurants in the project being tenanted by local residents.
As Australian cities continue to experience rapid population growth, there will continue to be a need for localised super-neighbourhoods.
But the key remains in the spirit of adventurous leasing, as Moore’s final word confirms.
“Super neighbourhood centres not only create an opportunity to implement flexible and brave leasing strategies – they encourage it.
“And because they are shaped by local communities, the people in that community have a vested interested in the success of their shopping centre.”
And if the strategy pays off for Frasers Property, the returns for their leadership in the sector should be encouragement enough for more conventional developers to follow suit.
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