Large Format Retail space all but off the market in Adelaide

Retailer demand for floor space in South Australia has driven Adelaide’s Large Format Retail vacancy rate to an all-time low of 0.74%.

Only 1,726sqm of the city’s Gross Lettable Area Retail (GLAR) of 232,933sqm is currently available, according to the latest data compiled by CBRE’s Research team.

Of Adelaide’s available space, three quarters is across two tenancies on Noarlunga Beach Road, along with 245sqm on the nearby David Witten Drive and 183sqm within Gepps X Home HQ north of the city.

Furniture retailers occupy the most space of any sector, 28.77% of Adelaide’s GLAR, followed by outdoor and electronics retailers on 9.44% and 8.36% respectively.

All three sectors recorded a spike in consumer spending over the past 18 months, as working from home rose in prominence.

“We’ve seen an increase in demand for space in Adelaide over the past 12 months, across almost every sector,” said Dallas Sears, CBRE Director – Large Format Retail in South Australia.

“The biggest mover has been caravan and camper trailer specialists, through new leases for New Age Caravans in Valley View, Maverick Campers & Caravans in Prospect and Stoney Creek Campers in Melrose Park.

“Furniture groups have traditionally been the slowest to move but they have been active, while other 2021 leasing transactions have involved clothing and pet supplies stores, a Salvos op-shop and a drive-through café.”

Growing demand and falling vacancies over a sustained period have resulted in a rise in net face rents, with the Greater Adelaide average having moved from $186/sqm in 2011 to $220/sqm at the end of 2019.

After a dip to $216/sqm in September 2020 amid market uncertainty following the height of the COVID-19 pandemic, they have hit a new peak of $226/sqm.

“Net rents continue to grow steadily and have already bounced back from 2020’s market instability,” Ms Sears added.

“Compared to a decade ago they’re up $40/sqm, or more than 20%, which represents an attractive outlook for the owners of retail space.

“Adelaide is seen as a safe-haven for retailers to open stores with a lower risk of interruption to their trade, given South Australia’s track record keeping major COVID-19 outbreaks and lockdowns at bay.

“Deals for floor space are currently coming together as quickly as we’ve ever seen.”