The leasing expert

James Coffey, CBRE, NSW leasing

Trends are stepping away from the old-school thinking “build it and they will come”. Today it’s about creating engaging community spaces, providing essential service and non-discretionary retailers to provide additional traffic.

The addition of medical centres, gyms and childcare facilities gives consumers more reasons to be there on a daily basis. The larger-format retail centres are looking to diversify product, and the lines are blurring a bit.

I think that personalisation is too broad for shopping centres which need to be something to everyone. It’s more about retail theatre – improving offline to compete with online.

It’s all based around theatre – that is, providing a better customer experience. If you think about food retailers, can you see things being made – flaming woks, doughnuts tumbling off a conveyor belt? This dramatic element went away for a while, but it’s coming back.

Shopping centres can create theatre to separate your business from the crowd – with social media as your window – and allow you to take advantage of more opportunities.

A good fitout is going to be well received. No two sites are the same, so there needs to be design control as well as individual design. A franchisor team needs to be looking at the market, the centre, the position of the store and then customise, while also keeping the brand standard. The consumer has pushed back on that cookie-cutter effect.

This is even a regional issue now. Why are people lining up at one cafe and not another? Is it the beans? The barista? The fitout?

For franchisees, it’s prudent to analyse the centre, to consider the speciality of the particular centre and whether or not that aligns with the customer perception.

Franchisees need to investigate how shopping centres encourage customer visits, what is the centre’s point of difference, how effective is social media? Franchisees definitely need to make sure social media is an important focus, because it’s the new shopfront.

Franchisees always need to have an understanding about what will happen during their lease term, so it is crucial to ask the landlord to disclose any plans.

In a new or redeveloped centre, it’s important to know if the franchise outlet will be in a brand-new area with significant demand or in the second stage of the development.

There’s reason to be cautious with shopping centre owners that are heading towards more environmental awareness because of the costs of fitouts and materials.

Star ratings require certain materials to be used. Some larger owners do have environmental targets, like Barangaroo in Sydney’s Darling Harbour. This means additional solar panels, no water wastage – even control of plastic cups and straws. There can be operational costs, So you definitely have to be aware as a new franchisee.

The food presence is continuing, but there has been a bit of a move away from the traditional franchise model. Centre owners are looking for independent operators that will drive the business. Food and beverage (F&B) drives traffic, and shopping centre owners often do like franchised food brands because they usually present well and give consumers a lot of options.

But centre owners are now looking to make sure they understand their critical mass of F&B, and pick the cream of the crop.

There’s also a trend for centres going outside and developing more of a community space with a focus on amenities, soft play areas and interesting spaces for F&B.

We’re also seeing the activation of laneways, with a services hub for the area to support public infrastructure.