Southeast Queensland shopping centres of the future to have more “non-retail” tenants and develop office, hotel and residential towers

What was once the standard shopping centre in southeast Queensland will be very different in the future, researchers say, as landlords respond to the online challenge.

SOUTHEAST Queensland shopping centre owners hit by the online challenge will increasingly move away from traditional retailers and embrace new types of tenants and land uses.

JLL Research director Bhavin Patel confirmed the increasing pace of the shift with landlords catching up with their global counterparts in their response to structural changes in spending patterns, social trends and demographics.

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“Landlords have been increasing food and beverage and entertainment offerings in major centres but they’re also experimenting with medical, coworking and lifestyle tenancies to draw additional foot traffic to centres,” he said.

“In future, we believe that as the build-to-rent residential sector takes off in Australia, landlords will also look to add residential uses to maximise site values as has happened in the US and other parts of the world.”

COWORKING tenants will feature increasingly in shopping centres WOTSO is expanding at Westfield Chermside.

The change is well underway in southeast Queensland with the sector absorbing 449,000sq m of retail space in the last three years.

While medical and lifestyle business have been increasingly prominent JLL Research senior analyst Alyssa Hutchinson said the next wave will be the coworking office sector and residential and other accommodation developments.

“Coworking across the Australian office market has grown in the past 12 months and the trend is gaining traction in retail, with many centres across the country implementing coworking strategies,” she said.

“WOTSO opened a coworking facility in Westfield Chermside last year and since then they have reconfigured its layout three times to accommodate increasing demand. We anticipate this trend will continue.”

Ms Hutchinson said — as outlined in JLL’s recent paper, Extracting Value from Retail — landlords were also unlocking value by repurposing space into office towers, hotels or residential high-rises.

“Building accommodation uses above retail makes sense from many perspectives,” she said.

“As well as extracting more value from an existing site by creating new income flows, these uses are complementary to existing retail uses and can benefit centre trade.

“We expect to see a lot more of this kind of development in southeast Queensland as the population and urban density continue to grow strongly over the next few decades.”