Demand for retail in Australia’s CBDs increases, plus additional reports

For PropertyGuru’s real estate news roundup, the share of businesses searching to lease retail space in Australia’s CBDs has finally returned to pre-pandemic levels. In other reports, India’s home sales hit 87,108 units, the highest quarterly sales of the year. Lastly, Asia Pacific’s luxury retailers and developers are upsizing their core locations to create multi-storey stores and personalised services for their best clients.

Australia’s CBD retail demand rallies despite challenges in the sector

Retailers in Australia’s central business districts (CBDs) were among the hardest hit during the pandemic years, with the reduction in office workers and residents driving a collapse in foot traffic and prospective customers. Vacancies skyrocketed, rents plummeted, and retail valuations took a beating. Retailers became more wary of city locations, with fewer opting to take out leases in CBDs, and a rising share looking instead to fringe and suburban areas.

Demand has slowly recovered and, this year, the share of businesses searching to lease retail space in Australia’s CBDs has finally returned to pre-pandemic levels.

In mid-2021, during the heart of the pandemic, the share of retailers looking specifically to lease space in a CBD accounted for just 5 percent of all location searches, according to realcommercial.com.au. The share has since trended upwards, reaching 9 percent in August this year – the highest share has seen since 2019. This increased demand for CBD retail space has been reflected in decreased vacancy rates.

India’s residential sector records sale of 87,108 units in Q3 2024: Report

In the latest report on India Real Estate: Office and Residential Market for July-September 2024 (Q3 2024), Knight Frank India revealed that the residential sector witnessed another robust quarter across the leading eight residential markets. According to the report cited in Housing.com, in Q3 2024, home sales grew by 5 percent year-on-year to be recorded at 87,108 units, the highest quarterly sales of the year. This brings the total residential sales to 2,60,349 units in the first nine months of 2024, 9 percent higher than 9M CY2023.  Mumbai led with sales of 24,222 units making this the best recorded quarterly sales volume since 2018.

Taking Asia Pacific luxury retail to the next level

Asia Pacific’s luxury retailers and developers are upsizing their core locations to create multi-storey stores and personalised services for their best clients.

The uncertain global economy and China’s economic woes have weighed on luxury goods spending in the Asia Pacific region. However, brands are using these quieter times to invest in the future. The super-rich (from China and elsewhere) keep on spending and brands today prefer to invest in existing customers and core locations rather than new locations and new customers.

“Brands are focused on sure wins, so they may rationalise fringe locations but will continue to concentrate on key locations in gateway cities around the region,” says Nick Bradstreet, head of Asia Pacific retail at Savills.

Lavish multi-storey destinations, often referred to as ‘maisons’ or ‘houses’ rather than mere shops, are appearing across the region, as luxury super brands fight for market share.

In June, Hongkong Land announced a $1 billion investment in its luxury Hong Kong shopping centre the Landmark. In partnership with 10 of its luxury brand tenants, including Cartier, Louis Vuitton and Prada, the listed developer will create 10 multi-storey, ultra-luxury stores which it describes as “maison destinations.”

The Property Report editors wrote this article. For more information, email: [email protected].