This article by Lachlan Dyson, Head of Property Management, Lendlease, forms part of an annual CEO Outlook feature, published in SCN’s 2023 Big Guns edition. The retail evolution continues with our Retail Shopping Centres showing resilience with expansion plans underway or in place for many centres. While CBDs nationally were most impacted in the past two years as a result of the pandemic, urban retail has displayed positive activity as the cities reopened and people returned for work and
entertainment.
The fundamentals of retail remain strong with people continuing to yearn for places to visit, to be entertained and immersed in experiences, social interaction and the instant gratification and satisfaction that retail centres provide.
The retail trends we saw prior to COVID have accelerated with the take up of online shopping, the rising importance of omni-channels to engage with consumers, greater mix of uses within our centres and the changing consumer. This is why we continue to share market-leading information to help our retailers evolve to meet the sector’s demands.
The relationship we have with our retailers remains strong. We’ve had to work closely and support each other as we emerged post-pandemic. This has given us direct insight into how their customers engage and it’s allowed us to really look under the hood to better understand their businesses and how we support their growth.
Lakeside Joondalup shopping centre, WA
The future of retail is exciting, particularly the convergence of bricks-and-mortar retail with digital.
Because of COVID, consumers connected strongly with their local communities – and it’s a trend that has stuck. Retail precincts are capitalising on a deeper sense of place more than ever before.
As we look to the future, we’re evolving our centres to cater to multiple aspects of consumers’ lives – they’re becoming true Urban Growth Centres that extract wider community value to drive attractive, long term and sustainable returns.
These Urban Growth Centres support the expansion of new categories – health, work, education and leisure – to increase their customer base, give people more reasons to connect with their centres and play a greater role in the lives of our communities.
Mixed-use, sustainable precincts are core to Lendlease’s DNA, and we have an incredible track record of delivering and managing assets across education, tourism, medical, residential and office.
Darling Square, NSW
Our retail sector in Australia is not immune to global trends that are shaping how we plan our future urban regeneration projects and include urbanisation, technology, demographic data and climate change.
Urbanisation sees a continued shift to urban living supported by rapid population growth, and the workforce transition to Millennials and Generation Z will significantly impact the way we live.
Technology is giving rise to the fourth industrial revolution that will see the blurring of boundaries between the physical, digital and biological worlds.
Demographic shift and ageing populations will transform everything from healthcare to real estate and we believe ethically and sustainability-minded consumers will continue to influence the future of retail.
Climate change requires responsible design and management of shopping centres. Sustainable behaviour is likely to earn a premium and consumers are more informed about business’ practices.
With consumers and retailers’ attention focused more on sustainable businesses, we looked at the future of our retail assets and what this means.
We have set ambitious and industry-leading sustainability targets. We want to achieve net zero carbon by 2025 and absolute zero carbon by 2040. These targets are bold by industry standards, and it’s not going to be easy to reach them. But we’re in a good starting position. For more than a decade, we’ve been investing in upgrades to our shopping centres, including on-site solar, along with a focus on water efficiency and waste minimisation.
Sunshine Plaza, Qld
To achieve our new targets, we’ll be rolling out a decarbonisation strategy and phasing out the use of diesel and gas. We’ve set a deadline for converting to 100% renewable electricity before 2030. Most importantly, we’ll be collaborating with our supply chain partners and tenants to transition to zero carbon by 2040.
To keep these commitments, we have to future-proof our retail assets.
Successful future retail centres will have dominant community purpose and connect convenience with experience. The centres will have easy access to surrounding amenities and services, such as education and healthcare, underpinned by a major focus towards environmentally and socially conscious precincts with leading sustainability credentials.
There are real opportunities for physical and digital assets to interact better. It may however take time to get the design of centres and store layouts right to continue to capitalise on opportunities such as Click & Collect, in-store experience spaces and personalising services.
Consumers – particularly Millennials and Generation Z – are buying less items but spend more on those that are ethically made from sustainable materials and have transparent supply chain credentials.
New brands will continue to evolve and increasingly inspire mainstream retail, as the socially responsible ideals of younger generations influence older generations.
This trend will also challenge the way we manage our shopping centres. Highly sustainable assets are attractive to investors and consumers. Delivering on high impact human and community experiences, health and wellbeing, and sustainability will protect and create long-term value for our retail assets.
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