An Increasing Commercial Property Trend - Micro Shops!
Shops in city centres around the country, including Brisbane CBD, are shrinking in size. You’ve probably noticed the increasing number of hole-in-the-wall coffee shops or tiny pop-up shops around the city. These are the new micro shops and they’re getting more and more popular.
Did you know that in 2013, Brisbane CBD was the world’s 10th most expensive city to rent retail space?! As more international retailers move into Brisbane, competition for prime retail space has increased. Couple this with increasing rent and it’s little wonder that retailers have opted for smaller, more adaptable spaces.
Micro shops are defined as shops that are smaller than 60 square metres. CBRE analysts report that as big global retailers continue to seek space in Australia’s various CBD markets, the average store size is likely to continue to get smaller.
Another phenomenon contributing to the micro shop trend is the growing number of online retailers seeking a small bricks and mortar presence. A great example is Contra. Contra started as an online store and soon grew a cult following. They have recently expanded their original store and just opened their second micro shop in Brisbane CBD (check out their website here or read a review of their new micro café here).
Many of these micro stores are popping up in ‘destination retail’ precincts like lane-ways and arcades. Hole in the wall operators Doughnut Time have numerous micro stores around Brisbane, as well as Australia. An example is their micro shop in the entrance to the King George Square Bus Station in the heart of Brisbane CBD.
Another example is Noosa Chocolate Factory which has two micro stores along Adelaide St as well as two other stores around Brisbane’s CBD.
So what does this mean for landlords?
Some people may speculate that these micro stores may be decreasing rent growth in the CBD. However, CBRE reported that retail rents grew modestly in Q4 in 2016.
In a relatively slow commercial market this is good news. It’s also a positive sign that fashion retailers like RM Williams, SEED, Hype DC and MJ Bale are moving towards a model of multiple smaller stores in CBDs around Australia. The micro store trend is seeing retailers refreshing their presence in the CBDs and increasing the viability of the brands. This is great news for landlords as it increases the chance of working with these reputable and established brands.
