This article is from the Australian Property Journal archive
HYBRID working has been a major driver of vacancies across Adelaide’s main retail high streets falling to their lowest level since 2016.
JLL Research has found vacancy rate average is 6.9%, with strips such as O’Connell Street, Hindley Street and The Parade all tightening over the past six months.
JLL Adelaide research director Rick Warner said the hybrid workplace has allowed more people to shop locally, translating into a booming fashion and food sector in the six months to the first quarter of 2023. He added that this has also been supported by record-low unemployment of 3.7%, which has put more money into the hands of local consumers.
“Demand is buoyant as weekday pedestrian traffic and robust consumer spending support these unique retail locations.”
Business turnover is being driven by people frequenting more hospitality offerings, pushing rolling annual retail trade growth in the cafes, restaurants and takeaway food services category a 20-year peak, while retail trade growth in the fashion category is at a 14-month high and has been in positive territory since late 2020.
Warner said numerous national retailers and new local businesses are opening along Adelaide’s retail high streets and predicted pedestrian footfalls to increase further when the record number of international students arrives in Adelaide.
“Demand for space along Adelaide’s retail high streets is robust, and it will be interesting to see if the renewed activity will offset the predicted slowdown in spending created by recent interest rate rises,” he said.
Vacancy rates decreased in five of the seven precincts including The Parade in Norwood, Hindley Street in the CBD, O’Connell Street in North Adelaide, King William Road, Goodwood and Glenelg’s Jetty Road.
O’Connell Street has been the best-performed strip over 12 months, where the vacancy rate fell from 11.5% to 7.3%.
Demand is recovering along Jetty Road, with the vacancy rate falling from 9.7% to 7.3% over six months.
Vacancy rates along King William Road and The Parade reached their figures since JLL Research began tracking the data, down to 4.7% and 3.3% respectively.
The Parade recaptured the title of Adelaide’s tightest retail high street with a 2.6% firming in the last six months.
Vacancies lifted by 1% over six months in Adelaide’s major retail destination Rundle Street, which was up to 8.3%, but well below the COVID peak of 13.7% recorded in Q3 2021.
“The medium-term outlook for Rundle Street is positive. The precinct is expected to benefit from the strip’s proximity to the rapidly growing employment zone Lot Fourteen and the return of international students,” Warner said.
Prospect Road also saw an increase over six months, up 1.2% to 5.3%, but in line with its range over the past 18 months.
