Inflation and increased interest rates finally started to grip along Adelaide’s retail high streets. The blended vacancy rate edged up by 0.9 percentage points to 7.3% in Q1 2024.
However, this moderate uptick in vacancy is coming from a historical low recorded at the last print six months ago and is still below the medium-term 5-year average of 8.9%.
Much like six months ago, occupier demand wasn’t uniform across the market and for the most part, vacancy increases were marginal in many high streets. However, the most significant increase was recorded along Hindley Street, increasing almost five percentage points to 18.1%. Conversely, the vacancy rate decreased along Rundle Street,King William Road and Prospect Road.
Rick Warner said, “Over the last couple of ABS retail trade prints, there’s been a significant decrease in consumer spending on discretionary retail categories in the age cohorts between 18-34 year olds. So, its really unsurprising that Hindley Street, which is almost entirely reliant on night-time economic activity from younger people, is struggling right now. However, the elevated vacancy along Hindley is concentrated on the area between King William and Morphett Streets. The West End, which is buoyed by the daily pedestrian foot traffic from UniSA and Adelaide’s BioMed City precinct, is still doing OK.”
“Conversely, other high streets with high concentrations of hospitality offerings that appeal to a wider range of consumers, like Rundle Street, The Parade, King William Street and Prospect Road are still tracking well. But these areas are also supported by a more diversified tenancy mix that includes fashion and daily needs retailing and services.”
“More broadly, Adelaide’s high streets are evolving into destinations, comprising more restaurants, cafes and small bars, and less traditional discretionary retailers like homewares, furniture, and recreational goods. This is the blueprint that we’ve seen in a lot of the most vibrant cities around the world, so it’s a good trajectory for Adelaide to be on.”
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