Perth's top shopping strips get the food-and-beverage mix right

Ashley Gibbs, of Ray White Commercial WA, said food was the largest growth segment of retail trade.

“This is evident in the prime retail strips, which are strongly aligned to the specialty retailing, cafe and restaurants,” he said.

“The best performing strips are those which have a high food and beverage mix and lots of cheap parking. One habit in Perth that has not changed is the affection for cars and the need for parking in close proximity to where we are going.”

As many of the main shopping centres undergo major transformations in a bid to lure customers, the traditional main streets are fighting back by providing a community hub with a good mix of tenants and places to relax with food and free Wi-Fi.

Colliers International’s director of retail investment services Ben Tana believes Perth’s retail strips are holding up well when compared with their shopping centre counterparts.

Oxford Street, in Leederville. Photo: City of Vincent

“While shopping centres cater for a broad range of consumer goods, strip retail often has a more curated offering,” Mr Tana said.

“A successful retail strip can attract an eclectic mix of operators who wouldn’t normally gravitate to a shopping centre.

“If a leasing agent can get the right retailers in a great building, they can create something really special for strip retailers and their customers. A lot of strip retailers are highly skilled in their retail specialty and trade well on their reputation for providing a unique service to customers.

“Food and beverage operators, especially ones that have tailored food offerings, are in demand.”

A shopping precinct in an exclusive location, such as Bay View Terrace in Claremont, was attractive to high-end retailers and continued to command top dollar.

Mr Gibbs said based on face rents per square metre, the top three premium shopping strips were in the western suburbs – Bay View Terrace; Napoleon Street in Cottesloe; and Subiaco’s Rokeby Road.

“This can be attributed to the affluent demographics within their respective catchment areas,” he said.

“Rents in Claremont have stabilised in recent times and are expected to trend upwards as international retailers join the mix and tenants look to leverage from co-location and the affluent surrounding suburbs.”

Mr Gibbs said Napoleon Street – the smallest strip by net lettable area of 5162 square metres – wasn’t faring as well. “This once-premium strip has fallen from grace as evident by the elevated vacancy levels and the exodus of tenants continuing with Commonwealth Bank being the latest casualty,” he said.

“Rents in Cottesloe have eased slightly as the ‘Amazon effect’ starts to impact the fashion hub and non-food retailers feel the impact of reduced spend by consumers. Rents are expected to decrease as rising vacancy rate sees landlords trying to secure tenants.”

Mr Gibbs expects to see Rokeby Road in Subiaco continue to bounce back. “After some years of negative stigma, the Subi strip is performing relatively well,” he said. “The broad tenancy mix coupled with the demographics of the area should see rents increase.”

He tipped the Eighth Avenue precinct in inner-east Maylands – named as one of Australia’s coolest neighbourhoods by Lonely Planet late last year – as one to watch as a sought-after location.

“Vacancy rates across all strips is below 10 per cent,” Mr Gibbs said. “As vacancy rates across most strips continue to be relatively low, this should see rents trend upwards.”

CBRE’s manager of retail leasing WA, Simon Chandler, agrees that Perth’s retail strips are proving to be resilient. “If they were going to be gone, they would have been gone already,” he said. “The worst is past us and we are beginning to ride it out now.

“I believe the stronger performing strips are always going to maintain a relevance in the retail market – the Bayview Terraces, Beaufort Street, Oxford Street.”

Mr Chandler said the scene was set for new players to enter the market. “The nationals are seeing that Perth is definitely on the rebound,” he said. “We are getting interest from nationals coming over which previously hadn’t happened for quite a few years.”

Mr Chandler said locations with good leasing opportunities at the moment included Hay Street in West Perth as well as Rokeby Road. “Moving further towards East Perth, I believe this will benefit from the new stadium,” he said. “It will offer some fantastic opportunity for food and beverage operators in the oncoming 18 months.

“It’s about the experience of retailing now, it’s not so much about purchasing a product. It’s about the full package that when you go there, you remember it. Food and beverage is a far more sensory experience.”

Colliers’ Ben Tana said suburban shopping strips contributed to the atmosphere and vibe of a community.