Australian Newsagency Blog

A blog on issues affecting Australia's newsagents, media and small business generally.

Shopping centre landlords will struggle to attract newsagency tenants

Mark Fletcher
October 22nd, 2020 · 1 Comment

Covid is demonstrating that high street newsagencies have significant benefits over shopping centre newsagencies in a pandemic. It is also helping high street newsagents be flexible in their approach to business, something that is more channeling in a shopping centre setting.

I suspect there are newsagents in shopping centres today looking for nearby high street location opportunities.

I suspect, too, there will be some who were considering a shopping centre tenancy who now consider it unlikely.

With shopping centre occupancy costs yet to reflect new market conditions, they are not appealing, especially when you consider the restrictions coded in leases as to floorspace allocation for categories outside what a landlord considers to be cor newsagency categories.

If shopping centre landlords do reset occupancy cost to reflect the new conditions, which would mean an occupancy cost decline of at least 33%, their space could be appealing for a newsagency or a newsagency related business.

It would be a bold landlord who makes that move. They are not known for wanting to be first for such changes.

The thing is, a newsagency is good for a centre, especially an evolved newsagency that is focussed on the future with a nod to the past. Such a business can be fresh, enticing and net traffic generating, not relying o=n the traffic a centre itself has.

With fashion retail looking at a tough year ahead and some other niches also challenged. the mix in shopping centres will change. That could be an ideal time for landlords to better support a traffic anchor like a newsagency. It will be interesting to see if they have what it takes to make their space commercially interesting to newsagents … because right now it is not commercially interesting.

One thing Covid has provided newsagents is options, meaning we are not as reliant on shopping centres as we used to be.

6 likes

Category: retail leases

1 response so far ↓

  • 1 Graeme Day // Oct 22, 2020 at 2:59 PM

    This would be a better outcome however the ocupancy costs are one thing and re location to a smaller floor area are another.
    This is often the case where downsizing is effected apart from the refit factor of spending extra Capex it often means the Landlord of yesteryear doesn’t actually decrease the real rent per sq. metre if fact quite the reverse they increase the sq metre rate as it is less space.
    This in turn defeats the purpose of return per square metre of Sales and Gross Profit.
    Real retail efficiency comes into to play here.
    Landlords do see Lotto as a main traffic draw especially within an evolved newsageny.

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