Number of Australian retail centres with casual leasing increases: JLL
There has been an increase in the number of shopping centres having some form of casual leasing, according to JLL’s latest retail report.
This annual report highlights the retail market industry and the views of retail centres managers view points on how the retail industry is doing.
Casual mall leasing is an important element in shopping centres with 91% of centres surveyed indicating having some form of casual leasing, up from 86% in the previous survey conducted in August 2016.
Vending machines remain the most common form of casual mall leasing closely followed by casual retailers, media advertising and “kiddie rides”.
Casual leasing is a small but important means of generating additional income for landlords, with many centres having budgets to meet from this revenue source.
Casual mall retailers, or “pop-up” retailers, were identified in 57% of centres, often occupying vacant tenancies or kiosks.
Some respondents indicated success in converting casual retailers into permanent tenants, which has been a positive outcome for the centre as well as the tenant.
60% of respondents indicated that their centres had current opportunities for casual mall leasing and 57% indicated they had received enquiries for casual leasing over the last six months.
This is down on enquiry levels for the six months to June 2016 (68%) although the report notes that centres with enquiry indicated their level of interest had increased.
The most common enquiry came from charity organisations, with 39% of centres indicating they had received enquiries from such groups over the last six months.
Of the retail enquiries, giftware and fashion were the two largest groups.
The level of enquiry from food and beverage operators was relatively low despite this category dominating overall tenant enquiry in centres.
Food and beverage operators are more willing to make the permanent commitment up-front while fashion and giftware operators have either short-term needs or desire to test the market first.
The low upfront costs offered by casual leasing provides such an opportunity.
Other enquiries have come from a range of local businesses, services and sporting groups.
This brings an element of the local community into shopping centres, and helps to build the centre’s attraction as a community hub.
There is a continued need for a balance between providing opportunities for new and exciting tenants that may invigorate a mall and ensuring the mall remains pleasant to customers.
Quality of presentation and aggressive “pledge” operators remain the major concerns that need addressing.