Several neighbourhood retail strips in Sydney and Perth appear to have ridden out the pandemic relatively unscathed, managing to decrease their vacancy rates during a period of global economic instability, according to new figures from Ray White Commercial.
The firm has released vacancy figures for a handful of major shopping strips across the Perth and Sydney’s inner west as part of two new Between the Lines reports, with some strips in both cities actually recording a decrease in vacancy rate since the pandemic hit.
In Perth, the Bayview Terrace precinct reported a vacancy rate of 4.46 per cent in the year to September 2020, down from 5.33 per cent a year prior. That represents three shops in the 43 shop precinct standing vacant.
Ray White head of research Vanessa Rader said that overall the Perth market was showing a level of resilience during the pandemic.
“For the commercial property market, a decrease in occupation and demise of some businesses has seen vacancy levels increase like all other states. However, the ability to rebound has been outstanding,” she said.
In Sydney, the Darling Street strip in Balmain recorded a 4.88 per cent vacancy rate in August, down from 5.2 per cent since the last survey was conducted in January.
Ms Rader said that the retail makeup of Darling Street had changed even in the short amount of time since the previous survey.
“Over this period, we have seen a reduction in the clothing and soft goods segment from 9.90 per cent to 8.71 per cent, making way for greater service-related industries now representing 17.75 per cent, up from 16.47 per cent earlier this year.
“Food remains key for this location with supermarkets, specialty food retailing and cafes equating to more than 50 per cent of the total retail floorspace across the Balmain strip,” she said.
Mixed results
Not all retail strips in the two survey areas recorded a reduction in vacancy rates.
Oxford Street, in the Perth suburb of Leederville, posted a 14.63 per cent vacancy, up from 6.04 per cent a year prior.
Rokeby Road, Subiaco, recorded a slight increase in the number of empty shops, too, rising to 14.99 per cent from 14.74 per cent.
Napoleon Street, Cottlesloe, also recorded a slight increase, albeit from a very low base.
Vacancies on that street reached 2.41 per cent – or 1 shop – to September 2020, up from a 0 per cent rate the year before.
Vacancies across all five Perth strips surveyed sat at 12.09 per cent, up from last year’s 11.24 per cent.
But Ms Rader said the Perth results were not necessarily entirely due to the disruption caused by the pandemic.
“While this year’s results are our worst recorded during our survey period, the limited change from 2019 suggest that a structural change in the way which the population interacted with retail strip shopping commenced prior to the COVID-19 pandemic,” she said.
Leichhardt’s Norton Street, in Sydney’s inner west, posted a vacancy rate of 12.8 per cent in November, up from 10.82 per cent from the last survey, which was conducted in August 2019.
Ms Rader said a change in building ownership between surveys had coincided with a move away from the strip’s traditional business offerings.
“Over this time, we did see several businesses change hands, with some food establishments leaving the strip, however, with new businesses in its place, once a strong European influence has now made way to a growing Indian and Asian food offering,” she said.