The Spatial Dynamic of Retail Planning and Retail Investment: Evidence from Australian Cities

Abstract

The last two decades have experienced important and far-reaching changes to the retail landscape. In Australia, retail planning and management policies have sought to attract key players to particular sectors of the city thought to be most at risk of retail decline including CBD (central business district) locations. This study seeks to highlight the difficulty such strategies may face by quantifying the levels of retail investment into different locations. By mapping the direction retail investment has taken over time, the study explores the dichotomy which exists between the spatial dynamic of retail planning and retail investment in Australia. In conclusion, the analysis shows that, from an investment perspective, city centre locations are a much higher priced option and do not provide an excess return to justify the higher entry price. Should investment flows continue to be channelled away from these locations, the potential cycle of decline will be difficult to arrest and will pose major challenges for city planning authorities regarding the future vitality of city centres.

近20 年来, 零售业状况出现了重要且意义深远的变化。在澳大利亚, 零售规划和管理政策一直致力于将重要的零售商引向市内那些零售业最 有可能衰落的地区, 包括CBD（中央商业区）。本研究对不同地区的零售投资水平进行量化, 试图凸显这些策略可能遇到的困难。我们绘出一定时间内零售投资的方向, 考察澳大利亚零售规划的空间动力以及零售投资的二元关系。最后, 分析表明, 从投资的角度看, 市中心价格较高, 所得收益难以抵消较高的进入成本。如果资金流进一步从这些地区流失, 潜在的衰退周期将难以遏制, 市中心未来的活力将成为城市规划当局的主要难题。

Keywords::

• Retail
• investment
• CBD

Acknowledgements

The authors wish to acknowledge data provision from Investment Property Databank and Real Capital Analytics.

Notes

^1. As discussed in the retail planning policy section of this article, most state strategic plans in Australia identify a typology of centres with the CBD or city centre considered the pre-eminent activity centre. Throughout this article we use the terms CBD and city centre to be synonymous. The literature particularly from the UK also commonly refers to ‘high street’ locations to represent town or city centre retailing. A recent report by Deloitte (2013) considers that “the high street should be the nerve centre of a town or a city” (p. 4).

^2. For an explanation of definitions refer to the Appendix on retail classification.

^3. Guy (1998) has discussed the complexity of retail classification which can include classification by type of good, by shopping trip purpose, by size and type of store, and store ownership. In this article we have utilised those classifications adopted from the two major data sources underpinning the analysis supplemented by standard definitions used in either academic literature or reports on the retail sector. These definitions are presented in the Appendix to this article.

^4. Where edge of centres are locations in easy walking distance to the primary shopping area and out of town are centres developed on greenfield sites or land not within the urban boundary (Guy, 1998).

^5. For an explanation of definitions refer to the Appendix on retail classification.

^6. For an explanation of definitions refer to the Appendix on retail classification.

^7. For an explanation of definitions refer to the Appendix on retail classification.

^8. Prime property is typically property of the highest quality and specification in the best location and secondary property is usually defined by exclusion, namely, property not meeting the criteria for prime (DTZ, 2013).

^9. For an explanation of definitions refer to the Appendix on retail classification.

^10. For an explanation of definitions refer to the Appendix on retail classification.