Changing lifestyle habits, greater food awareness and a preference for longer trading hours is driving increased landlord demand for F&B tenants, according to CBRE’s new retail Marketview report.
Leif Olson, CBRE head of retail brokerage leasing in Australia, said shopping centre landlords are looking at taking advantage of the after hours economy, creating entertainment precincts that go hand in hand with the expansion of food and beverage.
“This supports longer trading hours and the ability for operators to increase turnover, leading to higher rentals,” he added.
Olson said over the coming quarters the F&B sector should support sustained retail trade in shopping centres, as these retailers have the potential to draw consistent foot traffic.
According to CBRE Research, F&B retailers typically pay some of the highest rents per square metre in a centre, supported by high sales per square metre and their preference to be open longer.
The changing shopping preferences of consumers, who are demanding quality F&B options in line with greater health awareness, is also further driving the demand for an increased F&B presence in shopping centres.
“Driven by TV sensations such as Masterchef and MKR, consumers are more aware of their eating habits and are demanding F&B options, even in shopping centres, to be more of an experience,” said Olson.
“Trendy, high-quality restaurants and bars are highly attractive, particularly to younger demographics, which is encouraging centres to make room for additional F&B retailers to create a more vibrant atmosphere.”
Across Australia the footprint of F&B tenancies in shopping centres has continued to expand, with examples including World Square, Sydney – which has a thriving food and beverage precinct including Burger Project, Grill’d, Din Tai Fung, GYG, Arisan, Sushi Roll, Taste of Shanghai, Laughing Buddha Bar, Gazzi Bar, Noodles Your Way, Tang Hui and Nandos. This area is one of the most densely populated in the country and thrives on the after hours economy, the report indicated.
Other centres expanding their F&B offering is Pacific Fair in the Gold Coast, Westfield Miranda in Sydney’s Sutherland Shire region and Chadstone in Melbourne’s southeast.
“These centres are prime examples of how the F&B sector can add rent and higher foot traffic over sustained time periods following the inclusion of designated dinning precincts,” Olson said.
Despite the growth of F&B precincts recently, CBRE Research shows Australia is still far from saturation point, particularly in comparison to America and Asia.
“This should drive the continued influx of F&B retailers into Australian shopping centres, as landlords look to diversify their offering and meet consumer preferences for more dining options,” Olson added.
CBRE senior research manager, Australia, Danny Lee, said overall, the national shopping centre retail environment in Q1 2016 was healthy, particularly in comparison to 2010-2013.
“Clothing, footwear and personal accessories retailing recorded growth of 6.5 per cent in the year to February 2016, whilst supermarkets grew 2.6 per cent over the same period,” Lee said.
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