"Demand has gone ballistic in the last 12-18 Months" says Michael Bate of Colliers about the trend in QSR property
The latest research report from Colliers International is out - Find out what this means for the QSR industry in this interview with Michael Bate, Head of Retail.
QSR Media: What are some of the implications if you are a QSR (quick service restaurant) in this outlook report?
Michael: Property Outlook 2013 forecasts a continued divergence in the performance of both international and domestic retailers across 2013, as local players struggle with the high Australian Dollar and strong outbound tourism. The report predicts international retailers will continue to grow their market share, and we will be watching with interest to see if this flows through to the QSR sector.
Overall, tenant demand has held up reasonably well over the past year, given the cyclical and structural challenges facing the retail industry in general. We have seen considerable interest in the market from QSR's in recent times and we expect this to continue in the year ahead.
QSR Media: What will happen to rents this year?
Michael: The movement of rents is always dependent upon location, but there is never a shortage of interest in the CBD. There is little doubt that rents in the core CBDs are moving as demand for quality space is being sourced by an increasing number of International retailers. This is at the expense of national brands. In the better suburban shopping centres, rents continue to be linked to performance. There is still good demand from national brands for quality space in the better performing centres from the regional to neighbourhood classes.
QSR Media: Are there any new developments that would be of interest to QSR's?
Michael: It is definitely becoming more difficult for operators to secure finance – there are an abundance of exciting new concepts and initiatives being dreamt up every day, however getting financial institutions to back them is challenging. This is simply a reflection of the current state of the overall market – it’s not specific to QSRs, or even retail in general. It is intrinsically linked to the high cost of staff wages and insurance which requires operators to charge higher prices or sell a higher volume of product to generate the satisfactory profit to be successful.
The main thing that has changed in recent times in this sector is the sheer volume of enquiries we are receiving from QSR's. While always high, demand has gone ballistic in the last 12-18 months.
We can attribute this in some way to the rise of the “celebrity chef” concept, which has heightened interest in food in general and spurned a growing number of chefs who have decided to grow their brand by trying their luck at launching “the next best restaurant”.
Consumers are more willing to spend their hard-earned money on experiences rather than on things like fashion, which has resulted in an influx of the number of people eating out. This gives these chefs an increased market.
QSR Media: Any other comments?
Michael: The industry is moving in leaps and bounds in terms of the emergence of new concepts. Different styles of cuisines are taking on a new lease of life and from Greek food to Lebanese, the restaurants are no longer on the outskirts of the CBD, rather new concepts, designed at reaching a younger demographic are opening in prime retail hubs. Demand is coming predominately from international cuisines and is locally driven – it is very multicultural with a strong focus on fusion-style food. Australia is growing as a food society and with this comes the willingness to trial edgy food concepts. This is also the result of the increased ease of access to fresh and unique produce.
