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Upside for landlords in boosting night-time economy, experts say

February 12, 2019

The NSW Government is hoping to boost the night-time economy in Sydney other regional centres. Photo: Dallas Kilponen

A hairdressing salon that at night becomes a theatre space. A bookshop that opens till 10pm. An office that’s transformed after-hours into an art gallery. A café that doesn’t close till midnight.

The NSW Government is keen to inject new life into city centres at night, despite the lockout laws limiting licensed premises’ operations in certain areas of Sydney and Newcastle. Instead, they’re encouraging other businesses to open in the evenings, a move that looks set to prove a win for residents, visitors, businesses and owners of commercial real estate.

“There’s a lot of potential there for reviving foot traffic into these areas at night which will always have implications for rental potential to increase,” said Lee Follington, the principal of Ray White Commercial in Newcastle, one of the cities earmarked for a boost in the night-time economy.

The local council has been working to identify areas throughout the city for night-time uses.

“If it was successful, there’s the prospect of more tenant demand for spaces which creates competition, and prices go up too. I think Newcastle would certainly be a place with an appetite to embrace open-minded thinking about the evening use of commercial space.”

A cafe at 1 Martin Place, in Sydney's CBD, that is sometimes used to display artworks after hours. Photo: Charter Hall A cafe at 1 Martin Place, in Sydney’s CBD, that is sometimes used to display artworks after hours at tenant events. Photo: Charter Hall

NSW Planning Minister Anthony Roberts has released a new guide for establishing and managing the night-time economy, to make it easier for new evening businesses to set up, or existing businesses to start extending their hours.

The aim is to inject new vibrancy into centres after dark to make them busier, buzzier places to be, at the same time as the Government has indicated it’s not in favour of rolling back the five-year-old lockout laws, introduced in areas such as Kings Cross, to curb alcohol-induced violence.

This comes as a report by Deloitte Access Economics has found that Sydney is missing out on about $16 billion a year because its night-time economy is underdeveloped.

Urbis director Dianne Knott worked closely with the Government in examining how hurdles to night-time operating could be overcome. She did not want to talk about the lockout laws specifically, but said an integrated strategy that supported safety and access, with transport and business, was what was critically needed.

“It’s not just bars and night clubs, but you can have late-night bookstores, food trucks, night markets, cultural events, late-night cafes and all sorts of pop-ups that will bring all different demographics onto our streets at night,” she said.

“It has the potential to generate revenue every year, create more jobs and also make it safer at night on the streets with more people out and about. The City of Sydney has done a lot of work on this already and Newcastle is also doing work to turn shopfronts into art galleries, and create art spaces out of premises that aren’t being used at night, and we’ve even had a hairdresser become a performance space. There’s a lot of enthusiasm for this out there.”

In Sydney, the night-time economy generates an estimated $3.64 billion-plus in revenue each year, with more than 4600 businesses employing more than 32,000 people, on City of Sydney figures.

The City of Sydney council has registered strong interest in night trading in Newtown. Photo: Christopher PearceNewtown is one area in Sydney that has already embraced late-night trading. Photo: Christopher Pearce

The council has registered strong support for late-night trading across the city, particularly in Green Square, Broadway and parts of Surry Hills, as well as in more traditional late-night areas such as Kings Cross, Newtown and parts of the CBD.

Some office buildings are already activating parts of their sites to include night-time uses. At 1 Martin Place in the CBD, for instance, owner Charter Hall has refurbished under-utilised space on the ground and mezzanine levels for events, social meetings, group activities and the display, and sale, of artworks.

“We have created a very active, flexible space where every piece of furniture is movable so it can be adapted for many uses,” said Warwick Mayer, assistant fund manager with Charter Hall Prime Office Fund. “We’re finding it’s being used for all types of events, like meetings, presentations, music groups and even choir groups there.

“It does help to create a community within the building, which also means there’ll be a higher retention rate of tenants and a shorter down-time when we come to lease.

Tenants see value and we’re offering more amenity and, if it’s embraced long term, we do hope that it will lead to higher rents.”

While the space is only open to tenants after hours, it does have the effect of increasing night-time uses of the city, he believes, as workers might go out for a drink or dinner afterwards.

Other areas have also been tagged as potentially great sites for a stronger night-time economy. Ms Knott said these included Parramatta, Penrith and the Blue Mountains, and regional cities such as Tamworth and Wollongong, which already had eight sites pre-approved for evening markets, movie screenings, music festivals and art shows.

In Wollongong, James Mulcair of Knight Frank Illawarra said the city centre was still evolving but there had been a big increase in the CBD population after a period of apartment building.

“At the moment, we only have an eat street on Thursday nights but, in the long term, there would be a lot of potential there,” he said.

“For those leasing commercial property, it’s a smarter way to operate to have a night-time use too, as that may have the possibility of reducing overheads. I could imagine retail spaces with cleaner spaces that could be used for exhibitions and galleries. That would also encourage people to come to the CBD at night and could have an impact on asset values.”

Ms Knott said  the idea was to create healthy, vibrant places that didn’t shut at 6pm “because they aren’t the places that people want to live in. But interesting night-time businesses will attract more people and be of benefit to everyone.”

 

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