A changing retail landscape
With over 60 years of international experience in constructing, developing, and managing shopping centres and urban retail precincts, Lendlease’s long term commitment to the retail sector in Australia remains strong – and there’s a lot to be optimistic about.
The last two years have brought lasting changes to consumer habits as spending on services such as health and education continues to rise. As a result, the traditional retail tenancy mix will shift and we will see increased floorspace dedicated to entertainment, health and wellbeing, experience, and leisure; and an increase in mixed-use centres that have adapted to changing consumer spending.
Having an integrated multidisciplinary investment management platform comprising funds management, development and asset management allows us to respond quickly to this sector evolution. We are accelerating APPF Retail’s Urban Growth Centre strategy and forming new and exciting cross-sector partnerships.
We are leveraging our placemaking and product expertise to create mixed-use precincts that support thriving communities. While retail will remain the key focus of these precincts, the move to mixed-use will see a diversification of income streams and a complete change in the sense of place as people live, work and play within their local communities.
Plans are underway to densify land holdings and unlock mixed-use opportunities across our strategically placed assets including Lakeside Joondalup, Macarthur Square, Erina Fair and Sunshine Plaza. These plans are set to further embed these centres within their local communities and bolster the resilience of an underlying retail offer that is curated to meet consumer needs.
The considered consumer
The 2022 Edelman trust barometer found 58 per cent of people buy or advocate for brands based on their beliefs or values. Consumers are increasingly buying less but spending more on brands or companies that are ethical and sustainable.
We are actively witnessing the tipping point on consumer demand for sustainable outcomes and sustainability is proving a driver of top line retail performance. This is reflected in the demand and interest among investors and stakeholders for highly sustainable companies and assets too.
As a global leader in this space, we want to lead the evolution of our industry to be truly sustainable – environmentally, socially, and economically. We are working in partnership with our retailers to help us achieve the goal of being absolute zero carbon by 2040, and we are welcoming more and more brands who are demanding a commitment in this space too.
We’ve also seen a move towards consumers favouring local during the pandemic, whether that’s Australian-made products or shopping in their local area. Our centres are already hubs within our local communities and part of our role as a landlord is to partner with local hero producers and businesses and support them to thrive.
Bricks supporting clicks
Omnichannel retailers are fast outpacing pureplay when it comes to profitability and are ramping up their digital and multichannel investment to drive increased web traffic, brand awareness and sales.
The convergence of online and in-store strategies will continue to drive spend through both channels and there is a huge opportunity here. We are actively collaborating with and co-investing in progressive omnichannel brands who are agile and have shown growth through the pandemic.
Physical stores are integral in the delivery of multichannel strategies by providing last mile logistics solutions and a seamless in-store and online customer experience. As a cross-sector asset management platform, we are well set up to explore opportunities to support retailers’ last-mile fulfilment needs with our industrial portfolio and partnerships.
We are also leveraging our broader digital capability to support retail growth. We are using our data to deliver solutions that improve outcomes for customers, retailers and assets. This is everything from retailer analytics, building performance analytics and communications infrastructure to omnichannel retailing platforms which will be vital for the success of local hero retailers who may not have this infrastructure themselves.
Retail in 2022 and beyond
Our centres are certainly evolving and with a continued willingness to be adaptable in our approach, we see a very positive outlook.
Of course, delivering high quality consumer experience remains paramount. The focus will be on creating considered shopping experiences alongside unique activations that create a sense of destination. We expect to embrace more large-scale brand partnerships that drive foot traffic and can be leveraged by local retailers – more activations like Hello Kitty Town and Frozen that we brought to life in Darling Square.
We continue to believe deeply in the role of retail in sustaining communities and supporting growth. The growing investments we make in best-practice ESG and data-driven, consumer-led insights will continue to drive our operational performance and innovation.
With placemaking at the core of our retail approach, we are focused on creating community centred, digital and sustainable mixed-use destinations that thrive.