Post-pandemic increased foot traffic driving retail leasing markets
News release
20 November 2022
Inner CBD star in retail survey, overall market very healthy
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ADELAIDE, 21 November 2022 – Occupier demand for high street retail space in Adelaide is gaining momentum with vacancy decreasing in nearly all tracked high street retail precincts in 3Q22.
JLL Director, Strategic Research SA, Rick Warner said this has been particularly evident in the city and inner suburbs with a swathe of new shops opening, driven by an increase in daily pedestrian counts.
“Occupier demand along Rundle Street continues to improve and vacancy almost halved over the last 12 months, to 7.3% in 3Q22. This comes after two years of elevated vacancy which peaked at 13.7% in 3Q21 and vacancy has now fallen for consecutive six monthly periods,” Mr Warner said.
He said more workers returning to the CBD more frequently through the working week and increased daily spending had improved the attractiveness of Rundle Street for retailers.
JLL Retail Leasing Executive, Victoria Everett noted the attractiveness of the strip for national and international fashion retailers. “Rundle Street’s position as Adelaide’s premier fashion high street was consolidated with new store openings from Crumpler, Seafolly, Florsheim and Carla Zampatti that opened its fourth SA store and the SA arrival of Viktoria & Woods.”
The Rundle Street precinct is expected to benefit from the strip’s proximity to the rapidly growing employment zone Lot Fourteen, the recently completed Crowne Plaza hotel, as well as residential developments like The Adelaidean, Realm, and the East End Apartments have also supported increased foot traffic.
International student numbers are also expected to increase moderately in 2023 and beyond.
Hindley Street, CBD – highest vacancy but dropping fast!
At 15% Hindley Street has the highest vacancy rate of all tracked Adelaide retail high streets but live entertainment is leading its revival with the future looking bright.
Vacancy fell by the second largest amount across all Adelaide’s retail high streets. The strip was boosted by the long-awaited Hindley Street Music Hall that opened at 149 Hindley Street and the new Cherry Bar at 83-87 Hindley Street.
“The return of international university students to Adelaide will play an important role in the recovery of Hindley Street over the medium-term. The western end of Hindley Street is uniquely positioned to capture a large influx of daily pedestrian activity as a result of the ongoing health sector clustering within the Bio-Med City precinct boosting the day-time economy significantly,” Mr Warner said.
O’Connell St, North Adelaide – close to pre-COVID levels
Vacancy along O’Connell Street has decreased for consecutive six-monthly periods, reaching 8.3% in 3Q22 which is close to pre-COVID-19 levels.
The vacancy rate decreased 3.1 percentage points over the last six months – the strongest period-on-period decrease of all the high street retail precincts.
Restaurants and cafes account for 44% of the total tenancy mix which is the highest in Adelaide and it looks set to retain this crown with the development of high-density residential towers at 88 O’Connell increasing the local population over the medium term.
Jetty Road, Glenelg – vacancy increase but a positive future
Vacancy increased 0.9 percentage points to 9.7% over the six months to 3Q22 which is a good result after almost doubling to 8.8% in 1Q22. Low tourist inflows into Adelaide over the COVID-19 period, coupled with a return to offices by local residents, are believed to have reduced foot traffic and spending along the strip.
Over the medium term, a $50.0 million 65-room hotel development on the corner of Jetty Road and Colley Terrace is expected to revitalise the ground floor retail offerings as well as be a long-term tourism draw for the area.
The Parade, Norwood – slight bump on very strong recovery road
Retailer demand along The Parade remained positive in 3Q22 with vacancy increasing marginally to 6.0% - a massive improvement on its COVID-19 peak of 14.7% in 3Q20.
Development will result in an increase the local resident population and daily retail spend along The Parade over the medium term.
King William Road, Goodwood / Hyde Park – continued strong results
King William Rd is one of the stars of the Adelaide recovery with a vacancy of just 5.5% in 3Q22. This is the lowest vacancy rate recorded along the strip since JLL began tracking the market in 2015.
New food entrants to the precinct over the last six months have contributed to the low vacancy rate and this should fall further with the opening of apartments buildings in the immediate vicinity.
Prospect Road, Prospect – lowest vacancy in Adelaide (and also the smallest)
The vacancy rate along Prospect Road edged downwards 0.4 percentage points to 4.1% in 3Q22. Prospect Road remains the tightest retail high street tracked by JLL. However, it must be noted that is it also the smallest by tenancy count. New supply over the short-term will result in additional retail space added to total stock.
About JLL
JLL (NYSE: JLL) is a leading professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 102,000 as of September 30, 2022. JLL is the brand name, and a registered trademark, of Jones Lang LaSalle Incorporated. For further information, visit jll.com.