A report by investment bank UBS speculates that besieged department store Myer could hand back more than 90,000 square metres of retail space it rents within 15 centres by 2023.
UBS analysed Myer’s existing 58 leases, in particular those with leases expiring up to 2025, for stores which are not performing well.
Sub-letting the space might be an option for Myer.
The UBS report instead suggests the area, totalling 16 floors, could be handed back to landlords and re-let perhaps following a refurbishment or reconfiguration.
It is speculated Myer is already in talks with some of its landlords to slash its footprint.
The space coming up for renewal before 2025 represents 27 per cent of the total occupied by Myer nationally, www.theurbandeveloper.com.au said in this item published three days ago about the UBS report.
Retail-types which could occupy any backfill Myer space include supermarkets and mini-majors.
Alternatively, co-working offices are a possibility, UBS said. In 2017 we reported Vicinity Centres, opted to build a co-working office space, instead of retail, at the Chadstone Shopping Centre it co-owns with John Gandel. The space, above the David Jones store, was until then, the headquarters of the businessman’s Gandel Group of Companies.
Interestingly Vicinity, with SCentre Group, control most of the double-storey stores Myer has coming up for short-term expiry.
When Myer recently quit Sydney’s Westfield Hurstville, its former space was filled by Big W, Cotton On, JB Hi Fi and Woolworths – a move said to have improved shopping centre sales.
“In the majority of cases, we expect the landlord to be able to backfill the space to improve foot traffic, sales productivity and ultimately income over time, despite the short-term loss of rent during tenant remixing and fit-outs,” UBS is reported as saying in this item published today by realcommercial.com.au.
Last month we reported that Woolworths-owned Big W could quit 30 stores around the country. Big W will also vacate two industrial properties in Warwick, Queensland and Monarto, south-east of Adelaide.
Last month it was reported in this AFR item that Myer was potentially pre-committing to a new headquarters: about 10,000 sqm within a 24-level, 31,000 sqm A-grade office Poly Australia is proposing at 1000 La Trobe Street, Docklands.
Myer is on a lease at 800 Collins Street, Docklands, expiring in 2022. Eight months ago it was reported Myer was looking to halve its occupancy from six floors to three at 800 Collins Street.