The retail property landscape of Australia’s CBDs is changing forever as the footprint of traditional department store chains continues to contract.
Certainly, a new shopping era is dawning.
And if there were any lingering doubts, they have been quelled by the imminent exit of department store giant Myer’s flagship Queensland store from its namesake Myer Centre in Brisbane’s Queen Street Mall.
“Myer has made the decision to depart the Myer Centre Brisbane at the end of its lease in July 2023,” the centre’s owners Vicinity and ISPT said in a statement on Thursday.
“The decision comes after months of negotiations and follows several store closures around the country as part of its consolidation strategy.”
In the end, it said, Myer had chosen not to exercise its option for lease renewal closing the door on its 35-year anchor tenancy.
Myer chief executive John King indicated a suitable deal could not be agreed upon during the renegotiation but flagged that the retailer was seeking to continue to have a presence in Brisbane’s city centre.
“Whilst we remain committed to the Brisbane market, we have been unable to negotiate a reasonable commercial outcome with the landlord and as such will continue to look for an alternative CBD location,” he said.
With the Myer Centre store spread across four levels—and about half of its lettable floor space—its exit will leave a sizeable hole and the big question now is who or what will fill the void.
Vicinity and ISPT are remaining tight-lipped on their plans.
All they are saying is that they are “investigating a number of options” for the centre, including “a downsized contemporary department store and plans without a department store which we can now progress with certainty”.
“We look forward to delivering a reimagined destination in the heart of Brisbane’s evolving CBD and anticipate sharing our plans shortly.”
Globally, the landlords of major retail assets have been moving away from traditional department stores as foot-traffic anchors in favour of creating cultural and entertainment hubs with experiential tenants to cater to changing consumer trends.
Nearby in the Brisbane CBD, a new major luxury shopping precinct is nearing completion at the $3.6-billion riverfront Queen’s Wharf integrated casino mega-project. Its three-storey, 6000sq m T Galleria Emporium was due to open last year but construction delays due to record rainfall pushed it back until later this year.
Among almost 40,000sq m of retail, food and entertainment space planned for the development, it is being delivered as part of a deal struck between global retail giant DFS—part of the Moet Hennessy Louis Vuitton Group—and Destination Brisbane Consortium, the joint-venture behind Queen’s Wharf.
Brisbane’s six-level Myer Centre was built in 1988 and until 1991 it was the country’s largest CBD retail development. It has a gross lettable area of more than 63,000 sq m occupied by about 180 retail outlets.
Superannuation fund-backed ISPT paid $366 million in 2012 for a half stake in the asset at the George Street end of Queen Street Mall. It acquired an additional 25 per cent stake from Vicinity in 2016, taking its ownership share to 75 per cent.
Lord Mayor Adrian Schrinner said Myer’s decision to move out of the landmark retail property was “a sad day” for generations of Brisbane shoppers but a great opportunity for the city centre.
“With the Brisbane 2032 Olympic and Paralympic Games on the horizon, now is the perfect time for the centre’s owners to reimagine one of Queensland’s premier retail spaces,” he said.
“The Myer Centre once had live music on its lower levels as well as a fun park at the top and has always evolved and moved with the times.
“I think this is a fantastic opportunity for the centre to be reinvigorated into a vibrant, modern retail experience for residents and visitors and I look forward to working with the owners on their future plans.”
Article source: Queensland Property Investor
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