Retail-based businesses experiencing pivot as commercial rental demand increases in hobart
The commercial rental landscape within Hobart is extremely competitive, with many businesses vying for a small number of brick-and-mortar stores in a market where scarcity is high. From historically low vacancy rates, an increase in rental prices due to demand, and the rising cost of living, retail-based businesses are now pivoting from the traditional model towards a more strategic approach using e-commerce avenues.
As the world shifts on multiple fronts, work-related changes are amongst those in a current state of flux. The rise of the internet and the subsequent areas in which e-commerce has grown allow for businesses to reach an audience directly through their devices, whether that be direct email campaigns or social media advertising (where applications are aplenty), which businesses are increasingly utilising alongside retail shopfronts in a balanced approach.
Couple the capabilities of e-commerce strategies with a highly competitive commercial market, where the Tasmanian state capital’s commercial vacancy rate sits below 2%, and it is little wonder why retail businesses are re-evaluating their position in relation to strategy, as all factors require careful consideration in order to run a successful business in the complex landscape.
A recent revelation contributing to the merge from brick-and-mortar stores to a heavier e-commerce approach is the newly adopted work-from-home model, which has grown to a staggering 40% of employed people who report regularly working from home nationwide. This development has transitioned across into consumer purchasing habits, where online shopping is continuing to set record highs in how individuals are now spending their money.
In Hobart specifically, a noteworthy mention relates to the demand for office space required for businesses. This side of the market is progressively eating away at the available retail space, with former shopfronts being converted into office spaces all throughout the district, which adds to the overall competitiveness and subsequent scarcity of retail space as the demand continually drives prices higher.
The future of retail could only be defined as educated guesswork, although the signs seem to point towards a decrease in required storefront presence, with the increasing costs of space due to demand from other sectors and consumer’s online habits suggesting that the industry may continually move in the direction of a heightened online presence.
Based on the demand, it’s safe to suggest that the competitive nature for commercial space within the Hobart CBD will be continually sought after as varying businesses target what’s available, however the question will be which businesses require physical space, as opposed to those who can successfully reach their audience online and therefore can relinquish the need for physical space within the Hobart CBD.