Brick & mortar stores offer investment opportunity in New Year

As we move into the next phase of the Covid pandemic, brick-and-mortar retail is offering strong investment opportunities for commercial buyers looking to expand their portfolios, according to the experts.
Many brick-and-mortar operators were able to adapt during the pandemic by creating in-store experiences for their customers that they wouldn’t be able to enjoy online.
Essential retail stores like hairdressers and optometrists also survived the pandemic out of necessity; people coming out of lockdown needed to get a haircut.

Unikorn Commercial Property Founder Helen Tarrant believes the New Year could be an excellent opportunity to invest in commercial brick-and-mortar properties.

Helen Tarrant is a commercial property specialist and Founder of Unikorn Commercial Property – a buyer’s agency which has generated a $10 million commercial property portfolio.
Ms Tarrant says brick-and-mortar stores could be the perfect New Year investment opportunity as Australians broadly live with the pandemic and consumer confidence grows across the sector.

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“There’s been a noticeably big shift for regional markets looking for good commercial investments, particularly in Queensland,” Ms Tarrant said.
“There a range of factors that people are considering when investing in places like Cairns or Townsville. Things like services, amenities, employment opportunities and public and private investment all have driven the return on rental income increase across commercial properties.”

There are a range of factors which give physical brick-and-mortar retail stores advantages over online shopping.

However it’s not all good news for brick-and-mortar stores, with areas like the Sydney CBD becoming largely unoccupied during the pandemic as people were no longer visiting the city.
A range of tenants experienced the 40 per cent occupancy rates in Sydney – a majority of which were occurring in smaller spaces with cheaper rental costs.
“A lot of people who come to Queensland or Victoria to invest in commercial properties take a Sydney point of view where they think it’ll be cheaper because it’s not in a major metropolitan area,” Ms Tarrant explained.
“The opposite is true. You have restaurants filled up by locals, you’ve got barber shops with lines out the door. A lot of these industries which rely on brick-and-mortar commercial locations have been doing just fine because of the people in the communities keeping them alive.”

Space cube set up in Centenary Square to give online retailers a chance to have bricks and mortar store.

It’s worth noting that brick-and-mortar locations also have several advantages over online-only businesses.
Customers have direct access to physical store house employees, they can also physically touch and inspect a product and discuss buying options and issues in real-time.
Experiences are also adding value for brick-and-mortar stores, including things like make-up tutorials, live cooking or constructing demonstrations and having expert advice on fashion trends and how to dress.

Retail could see a boom in 2022 as people return to physical store fronts.

“Sydney will no doubt bounce back in the commercial property space from mid-2022. The opportunity will be to buy the right properties with short leases in vacant CBD offices spaces. The capital growth of these properties will be massive if you are prepared to hold onto them for the next 2 plus years,” Ms Tarrant said
“There’s no doubt the market will bounce back and historically Sydney has always been the first city to recover in capital growth after global impacts. 2022 will be a big one for commercial property no matter where you look to buy in Australia.”

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