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Who’ll step up, as more vacancies pop up ?

 

Across Australia we’ve seen a burst of commercial For Lease signs pop up… not all a result of the COVID-19 virus, but the recent retail and hospitality lockdowns will provide an extra challenge for the future of happy shopping precincts (and stakeholders)

Over the past few weeks I’ve enjoyed lots of fresh air walking around our (empty) Melbourne shopping precincts… the air seems quite healthy when there are fewer cars and no shoppers ! I was keen to see who has managed to stay open during the COVID-19 pandemic, and if any of those might be classed as pop up (nope). Along the way I noted which stores – usually hosting retail, hospitality / food and local services – were open vs closed vs vacant…

I surveyed 6 popular Melbourne shopping strips, in 4 council areas. I suppose it depends which week / day / hour I had wandered past, as many businesses have reduced their trading to start later in the day or close earlier – or only in the evenings to cater for take-aways. My survey was done over 3 weeks – each time around the middle of a day, middle of the week. Even as I walked along some streets and returned on the other side a short time later… some shops had opened or closed, confusing my tally ! I think the most interesting / useful out-take of those surveys was the number of vacant / For Lease / unloved spaces along each strip, compared to total street-level premises. Those empty spaces won’t change hour to hour, they will likely stay vacant long after street-side trading has returned to something “normal”.

Top of the list of empty spaces was Chapel Street South Yarra / Prahran with a massive 24% vacancy rate. Next was Gertrude Street Fitzroy at 16%, Greville Street Prahran 14%, and Brunswick Street Fitzroy 10%. The healthiest results (lowest vacancies) were along Carlisle Street Balaclava (6%) and High Street Northcote (4.5%)#

I also came across an article at TheAge.com.au which describes how “high streets continue to struggle under difficult conditions… On Chapel Street at least 10 businesses have already closed permanently since the lockdown began… foot traffic was down about 85 per cent four weeks ago”* That same article says a local real estate agent suggests the Chapel Street vacancy rate (pre-COVID ?) has hovered between 15-18% – also quoting other sources for Lygon Street Carlton at 13.5%, Victoria Street Richmond 50% and Bridge Road Richmond over 17%. Ouch, that’s a lot of empty space (but great opportunities for pop up !)

Although ‘strips are now starting to come out of lockdown, those once-thriving precincts will feel the impact of this pandemic for years to come… the forest of For Lease signs is surely set to grow as some businesses just won’t survive months of forced closure, or the transition to a “new normal” after COVID-19.

Many of those who do scrape through the tough times will be looking at options to reduce costs and commitments. They’ve spent the last few months assessing their business… including the relevance / future of brick and mortar outlets. I’d expect many structures and systems will be reviewed, including retail footprints.

As a result, landlords will experience significantly-less demand for their high street spaces, with many shops lying empty for longer periods. Hopefully those ‘lords and their agents will re-consider the options of short-term lettings – choosing to populate their vacant premises and support the neighbourhood until sustainable solutions come along. Not only do pop up retailers present an opportunity for landlords to immediately collect rent, they can provide potential for signing up to a longer lease (if the pop up survives an initial trial and decides to commit). Any new / unique / temporary retailers should also help bring shoppers back to a ‘strip, attracting visitors who’ll spend cash and support the local traders and community. And that can only be a good thing…

There are also opportunities (obligations ?) for the local councils and traders associations to step up. The lockdowns have not only seen shops closed for business – but also town halls, warehouse spaces and other venues which often host pop up sales and events. Those venues probably don’t have solid bookings for the next few months, as organisers are still unsure of what / where / when they can open to the public. Councils and associations should be keenly tapping into their resources and connections now, to initiate / plan / implement events which will assist the “re-boot” of local shopping precincts. If ever there’s a need for some valuable ”business and economic development”… it must be as we come out of the COVID-19 lockdowns. Councils and associations are crucial facilitators / stakeholders in the shopping precincts (…and don’t forget they’re also funded by those long-suffering traders…)

This is surely the time for landlords, agents and councils to re-consider their hesitance and suspicion of short-term traders – and be willing to do anything / everything to re-boot retail around our suburban shopping strips ! I’d say that planning and supporting local pop up initiatives would be a healthy start…

 

# surveys :

Chapel Street – Toorak Road / High Street, 6th May. 33% open, 43% closed, 24% vacant

Gertrude Street Fitzroy, 21st May. 34% open, 50% closed, 16% vacant

Greville Street Prahran, 20th May. 41% open, 45% closed, 14% vacant

Brunswick Street Fitzroy – Alexandra Parade / Gertrude Street, 21st May. 34% open, 56% closed, 10% vacant

Carlisle Street Balaclava – Chapel to Westbury Streets, 28th May. 75% open, 19% closed, 6% vacant

High Street Northcote – Bent Street / Westbourne Grove, 26th May. 47.5% open, 48% closed, 4.5% vacant

 

* source : TheAge.com.au / Chapel Street Lygon Street fighting to stay alive

 

 

images : pop up – Vacant shops /signs – Google Images

 

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