Continued Investment in CBD drives Retail Leasing

By Ben Laycock, Retail Leasing Director for Colliers, SA

The upgrade to Gawler Place completed in January 2020, has further enhanced Rundle Mall; the No.1 Retail precinct and heart of the Adelaide CBD where people can shop, visit and spend time. Now complete, Gawler Place is a vibrant, green and people-focused street, providing a high-quality retail experience.

Gawler Place is one of the busiest streets in Adelaide carrying around 25,000 people per day. It connects city workers, students, visitors, tourists, delivery and private vehicles, and taxis to Rundle Mall and North Terrace from surrounding streets and carparks. The project included wider footpaths and new road surfaces to create a low-speed shared use environment for vehicles, bicycles and pedestrians. We’ve seen improved lighting, an innovative shade structure in Gawler Place north, large trees and understorey plants. New outdoor dining areas together with new Public Art creates a sense of connection and discovery among consumers.

Rundle Mall has seen a major closure announced with Harris Scarfe (in Voluntary Administration) to close the CBD Department store of 9,000sqm in Rundle Place. This will leave David Jones and Myer as the only remaining Department Stores in the Adelaide CBD.

There are several Landlords now reinvesting in their properties in Rundle Mall which still boasts a footfall of some 22+million per annum. Contemporary redevelopments of 122 RM, 138 RM, 41RM and Rundle Square are demonstrating the need for owners to upgrade the properties to meet the ever-changing needs of today’s retailers. Modern full height glazed shopfronts with high ceilings and open plan layouts are the predominant features.

Adelaide CBD is seeing unprecedented lettings of office buildings with the “new generation” (post 2004) vacancy rates dropping to less than 4%. This is in the “new CBD core” - west of King William Street which is the geographic centre of the city. Older buildings on the other hand, have vacancy rates rising to above 12%. The ‘New Gen” buildings are well located with excellent access to public transport and carparking with greater convenience, choice and amenity for the office worker. The city is seeing its greatest movement in the Defence, Resources and Space sectors. This movement has seen increased retail activity with the demand for quality Food and Beverage creating a precinct of convenience retail. We are noticing changing consumer behaviours like office workers choosing to meet out of the office in cafes and venues that offer a different social setting and respite from the working environment.

Some noticeable reflections of this trend are the several projects in Franklin Street (U-City, GPO Exchange) and Waymouth Street (ANZ House, EY House) with new Food and Beverage either leased or under development. The recent move of the Calvary Hospital to its new high profile “home” corner of Pulteney Street and Angas Street has seen several new Food and Beverage operators open nearby to better service the needs of patrons, visitors and staff – Est Ovest, Mothers Milk, Jamaica Blue, Motorcycle Society, Diaspora Kouzina. In addition, a hotel and at least two mixed-use developments are underway to cater for the demand in this area.

In the west of the city, the Medical, Research and Education precinct housing, Royal Adelaide Hospital, South Australian Health and Medical Research Institute, the proposed new Women’s & Children’s Hospital, and the western campus for Adelaide University and University of South Australia have seen new opportunities for Food and Beverage and Service retail.

The next major development in the CBD likely to commence construction in 2021 will be the $400m mixed use redevelopment of the iconic Adelaide Central Market Plaza precinct. New retail and commercial space, a 35-storeyresidential tower, 249 room hotel and 210 apartments are expected. This will transform this precinct adding to the already iconic Adelaide Central Markets, China Town and, the successful vibrant Retail and Restaurant strip of Grote Street and Gouger Street.

Continued Investment in CBD drives Retail Leasing by Ben Laycock originally seen in Issue 9: Colliers CBD Retail quarterly.