NEW OPPORTUNITIES AS BANKS SHRINK RETAIL FOOTPRINT
Written on the 25 August 2015
THE shrinking retail footprint of the banking sector is proving no headache for landlords in Sydney with a vacated West Ryde site among the latest to be hotly contested.
Tile specialist Beaumont Tiles has just signed a 10-year lease on a former ANZ bank site in the city's north-west after garnering strong interest from a range of tenants.
CBRE's Luke Bryant says the 1002 Victoria Road property, which was vacated by ANZ in late 2014, benefitted from being a free-standing property in a prominent position in West Ryde's central business precinct.
"With strong interest in the property from a range of prospective tenants, the owner selected Beaumont Tiles due to the strong lessee covenant and long initial term," says Bryant.
The 425sqm property was leased for an initial rental of $180,000 per annum gross, with two additional five-year options available.
Bryant, who negotiated the deal in conjunction with CBRE's Alex Mirzaian, says the transaction is evidence of an emerging trend where banks were downsizing their physical occupancies amid the rise of online shopping and banking.
"Over the past 12 months, we have seen a prevailing trend of major banks significantly reducing their retail footprint in suburban areas, particularly local shops and suburban central hubs," Bryant says.
"As the major banks' retail leases come to their expiry dates, we are witnessing the traditional 450sqm footprint now being significantly reduced to approximately half that.
"The rise in online shopping has resulted in more people doing their banking online, with banks appearing to be adapting to this shift in attitude by transitioning retail banking to online as branch visits become less popular."
Bryant says the shrinking presence of banks in suburban markets is unlocking retail opportunities.
"Landlords are losing banks as tenants, but this market shift is opening doors for new entrants vying to gain a presence in the strip-shop retail market.
"The majority of Sydney suburbs are witnessing a similar trend as banks adapt to meet the needs of the modern consumer.
"However, we see this as a positive change for the suburban market, with it unlocking a plethora of opportunities to revitalise tired strip shops and outdated buildings."