This article is from the Australian Property Journal archive
THE Adelaide retail strip vacancy rate has increased marginally, but it was a mixed bag with some high streets performing better than others.
The overall vacancy rate climbed 0.9% to 7.3% in Q1 2024, according to JLL. However, this is still below the medium-term five-year average of 8.9%.
JLL director of strategic research Rick Warner said much like six months ago, occupier demand wasn’t uniform across the market and for the most part, vacancy increases were marginal in many high streets.
“However, the most significant increase was recorded along Hindley Street, increasing almost five percentage points to 18.1%. Conversely, the vacancy rate decreased along Rundle Street, King William Road and Prospect Road,” he pointed out.
Warner said the results along Hindley Street was not surprising.
“Over the last couple of ABS retail trade prints, there’s been a significant decrease in consumer spending on discretionary retail categories in the age cohorts between 18-34 year olds. So, its really unsurprising that Hindley Street, which is almost entirely reliant on night-time economic activity from younger people, is struggling right now. However, the elevated vacancy along Hindley is concentrated on the area between King William and Morphett Streets. The West End, which is buoyed by the daily pedestrian foot traffic from UniSA and Adelaide’s BioMed City precinct, is still doing OK,” he said.
Warner said other high streets with high concentrations of hospitality offerings that appeal to a wider range of consumers, like Rundle Street, The Parade, King William Street and Prospect Road are still tracking well.
“But these areas are also supported by a more diversified tenancy mix that includes fashion and daily needs retailing and services.
“More broadly, Adelaide’s high streets are evolving into destinations, comprising more restaurants, cafes and small bars, and less traditional discretionary retailers like homewares, furniture, and recreational goods. This is the blueprint that we’ve seen in a lot of the most vibrant cities around the world, so it’s a good trajectory for Adelaide to be on.” Warner concluded.
