For any landlord, extracting maximum value from their real estate holdings is a critical focus. This is becoming increasingly evident in CBD markets around the country as the owners of office buildings and shopping centers look at new and innovative ways to create additional retail space. In doing so, savvy landlords are pocketing extra income by tapping into strong tenant demand.
A tried and true strategy for shopping centre owners is to look at casual mall leasing, creating kiosk spaces or events within the centre. In doing so, they not only earn extra income but also provide new draw cards for customers – as could be seen by the busy queues at the World Square World Cup Soccer live site and the recently installed 8m x 4m sized LED screen which will go live from Monday ready to screen the Melbourne Cup in November.
Westfield is another landlord that understands the value that can be generated from ground floor lobby space. At its 77 Castlereagh Street office tower in Sydney, the majority of the valuable ground floor is dedicated to providing an income producing entry point to the adjoining shopping centre. For office tenants, the main entry lobby is housed several floors higher in the building's podium.
An example involves 83 Clarence Street in Sydney, where owner DEXUS took an unused loading dock on the Kent Street side of the property and created two food and beverage tenancies. It's been a highly successful strategy (assisted by CBRE on the leasing front) that demonstrates how landlords are thinking outside the square to create new income streams.
And we can expect more of the same in Sydney as George Street is pedestrian-ised. This will create a whole raft of opportunities for owners to rework their buildings and capitalize on continued demand from national and international retailers.