The Central Business District (CBD) of Sydney needs to adopt a greater Asian focus to improve the liveability of the city centre, according to a report released by Cushman & Wakefield, a global leader in commercial real estate services.
According to the report, around 2,700 residential units are forecast to be completed in the next five years, which will add approximately 5,700 persons to the CBD resident population – equivalent to 20% growth. However, it is the structure of that growth that also needs to be considered.
Although Sydney ranks highly in the plethora of city liveability indices, this is mainly predicated upon its comparatively low density living which has been aided by the current retail hierarchy. Regional shopping centres satellite the CBD, replicating much of its offer, eroding the need for consumers to venture into the city, and consequently the focus on CBD retail and city centre liveability has slipped.
The rise in residential construction activity in the CBD casts the light back onto the city centre. As CBD living is on the cusp of a revival, CBD liveability needs to improve and the retail offer is a key component of this.
Dr Dominic Brown, Head of Asia Pacific Research and author of the report said: “The largest growth in population across the Sydney CBD is expected to occur amongst those aged 30-50 years, however the fastest growth is expected for those aged under 15 years and over 70 years.
“This trend is being reflected in changes in household structure, with smaller couple only households growing the most, but family households growing the fastest. The CBD population has also become increasingly Asian, which is expected to continue into the future.”
The report highlights some of the challenges currently facing Sydney's CBD retail offer. Most notable of these is that it predominantly caters to a transient daytime population – office workers and tourists – and that it has a small core centred on Pitt Street.
Development authorities have already recognised the integral role that retail provides in enriching the vibrancy of the city, and Cushman & Wakefield believe developer, landlords and retailers themselves need to seize the opportunities on offer to help transform the retail mix in the city into not only being a place to visit, but also a place to live.
Sam Cuccurullo, Head of Asia Pacific Asset Services, commented: “Sydney is about to experience several major redevelopment projects including George Street and Circular Quay. Now is an ideal time for developers, landlord and retailers to re-evaluate their modes of operation, look to the future and capitalise on the opportunities being presented.”
Currently, only 37 of the top 250 global retailers have a presence in Australia. While there are many reasons for this, in many cases their speed of entry into Australia has been limited by their site selection strategy, which is often restrictive and time-consuming, so the focus needs to shift to sites outside of Pitt Street.
Now is the ideal time for retail moves to be made in the CBD, with the construction of the light rail along George Street and accompanying pedestrianisation of the precinct, as well as AMP’s redevelopment of their site on Circular Quay and Dalian Wanda’s plans for Goldfields House. All these developments are likely to drive significant visitation and foot traffic, of which activation of street frontages will be key to taking advantage of retail opportunities.
Peter Seeto, Head of Retail Property, commented: “Retail tenants can benefit from the new wave of development in the CBD, with increased variety in choice of location, enabling them to time their market more efficiently. We also expect landlords to benefit however, with the increased cachet that comes from having a high profile internal retailer as a tenant.”
Expansion of international retailers away from the core is just one aspect. The needs of the growing resident population also have to be addressed for CBD living to be more than just “functional”. This is made more pressing by the fact that over 50% of CBD households do not own a car and are in effect, a captive population.
Retail diversification therefore needs to embrace a wider variety of choices for eating out, night time entertainment in general, health and wellbeing as well as bulky homewares goods normally found in “homemaker” shopping centres.
Sam Cuccurullo points out: “We see the need for a wider range of night-time dining options in the CBD that go beyond just ‘top-end’ or ‘take-away’, that is reflective of the move towards smaller units and smaller kitchens. A brief look at Singapore, Hong Kong and Tokyo provides a number of examples of how the CBD can improve in this area.”
Dominic Brown added: “What is currently lacking is the integration of retail into all aspects of city life, not just employment and tourism. Gateway cities in Asia have shown how this can be done and Sydney would be well-served to learn from these experiences.”
View the Cushman & Wakefield Report here.