Recent evidence shows residential retail is becoming more and more popular as developers diversify their portfolios to lead towards creating the best destinations across Australia.
Anticipated population growth is driving this with an expectation that there will be a return to pre-COVID levels beyond 2023 driven by Net Overseas Migration (NOM). Our major cities across Australia will continue to attract most of this population growth.
The retail landscape here in Australia is shifting with an emphasis on long-term investments and extracting value from existing retail assets through the creation of sustainable, exciting places for communities to live, work, play and connect.
Stockland recently communicated the company’s vision to dynamically reshape its portfolio, seeking to “extend residential leadership while reducing exposure to Retail and Retirement Living seeking to increase Residential, Workplace and logistics from 50-70% of Net Funds Employed (NFE) while down weighting Retail and Retirement Living from 50% to less than 30% of NFE.”
There is an increasing focus on building resilient and adaptable portfolios that will deliver value over the long term.
QIC Real Estate has responded to changing consumer preferences with its Town Centre Strategy that sees a transformation from primarily retail centres to retail-anchored mixed-used destinations. More recently, Vicinity has moved into build-to-rent (BTR) to become the “landlord of more than 1,100 build-to-rent apartments as it cranks up the rollout of a $2.9 billion development pipeline, significantly diversifying the uses of its vast suburban land bank.”
We have seen from projects in the UK that build-to-rent can create vibrant neighbourhoods that represent the very best in mixed-use development. With the BTR sector growing rapidly across Britain – the latest British Property Forum statistics show there are now 237,362 build-to-rent homes in the UK, including both London and the regions, of which 73,739 are complete, 47,764 under construction and 115,859 in planning.
In fact, BTR is seen by many as the cure to the regional imbalance and inequality (the ‘levelling up crisis’) that exists across the UK. BTR can offer new and relocating workers with high-quality rental homes in regional areas, re-invigorating regional town centres and urban areas. The creation of high-quality BTR homes, conveniently located close to transport, commerce and retail services, supports new workers and residents, builds strong communities, and creates more sustainable town centres. According to Knight Frank’s Intelligence Lab, for this to happen in the UK, there needs to be “an investment in infrastructure, large-scale regeneration and adequate housing provision. BTR can play a key role here, providing high-quality rental housing for new and relocating workers.”
It seems the current UK BTR drivers are the need to provide homes and stimulate regional economies and town centres. Whereas, here in Australia, we are seeing a natural evolution of shopping centres to be complemented by hotels, residential apartments (BTR) and community amenities to create integrated hubs for economic activity and community connection.
According to the Gensler Residential Experience Index (2021), places that support a variety of activities and behaviours yield better experiences overall. The best environments support a diversity of activities and experiences.
While this remains relatively unique to the Australian and NZ markets, this emerging mixed-use BTR model, which includes the redevelopment of existing retail assets, is one of the more exciting evolutions we’re seeing in the local BTR landscape.
Traditional mixed-use developments will see a synergy of residential, retail and other uses through a designed proximity, whereas the BTR model is unique in that it offers a very direct partnership between residents and the retailer, with both ultimately coexisting under the same banner. This might exist in the form of discounted cinema tickets to residents, or tailored membership deals to gymnasiums and coffee shops.
Ultimately, this helps establish a vibrant offer for prospective renters as well as enabling the retailer to speak directly to a demographic that might not otherwise be spending their weekends in a shopping centre. Furthermore, the retailers themselves can be afforded opportunities to trade outside of the core centre hours and provide for things such as event catering and other specific functions within the BTR social program.
From a feasibility perspective, this mixed-use BTR model offers tangible benefits in potentially reducing the pure BTR amenity via leveraging off the existing retail, entertainment and health offers. Conversely, this will begin to transform the existing retail tenancy mix in the centres, add vibrancy and establish a more copacetic relationship.
In tapping into an existing transport infrastructure that often exists within the shopping centre, residents are provided with an immediate network of pre-established sustainable transport options. This can help to drive down the necessity for abundant residential parking and place a greater focus on reducing the carbon footprint of the overall development.
Shopping centres need no longer be places of purely transactional benefit. The diversity and richness that comes from mixed-use means social cohesion can return in the form of community hubs where we see true integration of live, work and play.
Designing for this evolution requires the fusion of nature, culture, leisure and a neighbourhood home together, to produce a distinct sense of place that reflects our shared diverse histories.
The fusion of residence with retail brings with it the opportunity to create integrated community hubs that bring a sense of place – similar to that of a town centre within the suburbs of our main cities.
Senior Associate Architect | National Design Lead