The Future Of Retail Property
Technology is gradually changing how we communicate, the tasks we do at work, and that is going to continually morph what our retail and shopping plazas look like, and the purpose they serve.
We’ve already seen trends reshaping the office and hospitality property market. We can find great deals on hotels online, but still travel to stay in the hotels, apartments, and resorts that best meet our needs and tastes. They may be in growing tech hubs if we are entrepreneurs, digital nomads, or VCs. Emerging culinary destinations if we are passionate about food, and need an appetizing break. Or in green LEED certified modern hotels or off-grid resorts if we care about the environment. Office design has evolved too. We now have more open plan spaces, shared and coworking offices for startups and online businesses, and corporate headquarters that incorporate entertainment, retail and food, and even housing.
As such, retail is changing too. What we need and want from local shopping plazas will keep evolving just like it does in office and hospitality properties. Retail properties are being reconfigured and redevelopment. Some have adopted a smaller unit design, which meets the spacing requirements of across a spectrum of uses to serve the public better.
One of the primary changes in function we have seen recently is how retail plazas are becoming centers for connection and entertainment. We are living more and more in the virtual world. Yet, that is creating more need for real world connection. We are social creatures by nature, and Facebook alone and video chats can’t fully replace those basic human needs. So, we are seeing more events at local malls, and the inclusion of indoor play areas so the whole family can get out.
This is on top of the ongoing desire for getting out to eat, share coffee, and meet new people over drinks. We can have groceries delivered, but we want to get out now and again, and need to. There are other basics that technology likely won’t replace for a while either. Mechanics, cash banking services, dentists and medicine.
For all the other times and things that we can order online, retailers will face an increasingly growing amount of pressure to have local pickup and distribution centers to compete on speed, and facilitate returns. Some existing retail spaces will be redesigned with this in mind. Others will become showrooms (think Tesla) and fitting rooms for getting that hands on experience and fit right, before buying online.
How we get to and from shopping plazas will change too. If it is not Uber, driverless cars will drop us off, and pick us up. They will be able to park themselves more efficiently while waiting, so retailers will not have to provide such large parking spaces. Redeveloping retail spaces to meet the retailers true space needs will prove to be a worthwhile investment and allows your property to remain competitve in this tech-savvy society.
The face and fabric of retail property is changing, much like everything else. As developers get to work on redesigning and tweaking properties to meet those future needs, consumers will be better served, businesses can become more profitable, and commercial real estate investors should find they do very well too.