Traditional high street locations like Military Road on the Lower North Shore are the beneficiaries of more people working from home. Local retail is outperforming and investors are circling.
Perhaps surprisingly, COVID-19 has strengthened our retail sector. Luckily, on the Lower North Shore our retail businesses benefit from the strong social economic demographic. On top of that, over the last 18 months, our population has largely avoided the city and bigger shopping centres. As a result, after the initial lockdown, shops in our area have experienced a strong bounce back and reported solid earnings since.
Sure, there was a hit to those businesses in 2020 from March through to June. but since then the sector has bounced back strongly. It is evidence of how resilient the local market has been through COVID-19. The local community has really supported its businesses.
For me, as a commercial property specialist leasing, selling and managing retail and commercial properties in Mosman, Neutral Bay, Crows Nest, Lane Cove, Cammeray, and up to Manly, this period has been eye-opening, particularly when you compare the trends in CBD retail and larger shopping centres. Our local sector has bucked the sad and sobering trends seen elsewhere.
At the peak of the pandemic, rent collection for large retail malls were as low as 30%. As economies are reopening, rent collections for large retail malls are now tracking at 70%-90% with foot traffic close to pre-pandemic levels. The retail sector nationally is continuing to lose market share to e-commerce (11% of sales in Australia were made online vs 7.2% in the prior year, per the ABS at November 2020; and expected to reach 20% by 2025). But what we’re seeing in the Lower North Shore is a concerted effort by the community to shop local.
I read with interest in the Mosman Daily recently that Mosman business The Fur Salon is enjoying the uptick too. Thousands of dogs found new homes during COVID-19 lockdown boosting the multi-billion pet industry.“COVID-19 will result in probably the biggest increase in pet ownership in our lifetime,” the owner Anneke Van den Broek said. “What happened is people almost elevated the importance of this fur baby within their house because it became their emotional support, it became their playtime and it became their excuse to go out and do physical exercise.” The salon experienced significant growth as a result of pandemic puppies.
The Sydney Morning Herald reported that there’s a new $1.6 billion mixed-use project on track to be delivered by 2023, sitting on the corner of 558 Pacific Highway and Christie Street, that will comprise a 16,638 square metre office tower, 637 apartments, a new retail and dining project, supermarket, civic plaza and public library. As I said, developers and investors are circling.
We have seen first-hand the impact of savvy retail investments here in the Lower North Shore. We are currently looking for businesses to be part of Lane Cove’s newest retail and commercial offering, Lane Cove Central, opening in late 2021. Anchored by a brand new Harris Farm Market, Lane Cove Central will soon be the life and soul of the village. Humming with vitality throughout the day, it will be a warm and welcoming place to shop and eat for the community.
In Neutral Bay, we have managed since its opening Muse by Helm which was a new out-of-the-ground development. Once built, we sold all the retail premises, then leased them to successful retailers and continue to manage it today. It’s another local retail success story, anchored by strong tenants and buoyed by a shop local mentality and a sense of community.
Curious about retail in our market, talk to Scott.
With more than 30 years’ retail and commercial property industry experience as an ethical advisor and negotiator, Scott Stephens has worked with some of Australia’s leading property owners including AMP, Stockland, QIC and the DEXUS Property Group as well as numerous private owners.
Scott Stephens, Director of Retail & Commercial, LREA
Ray White Lower North Shore Group
0409 960 006