For lease: Hindley Street vacancies the highest since COVID

Nearly one in five Hindley Street properties are now empty with a surge of night-time venue closures contributing to the highest vacancy rate since the pandemic hit four years ago.

Jun 11, 2024, updated Jun 11, 2024
Hindley St vacancy rates are the highest for years. Photo: Tony Lewis/InDaily

Hindley St vacancy rates are the highest for years. Photo: Tony Lewis/InDaily

Nearly 20 per cent of Hindley Street properties are now vacant according to a report from real estate services firm JLL, which said the closure of night-time venues was to blame.

The vacancy rate along Hindley Street rose by 4.9 percentage points from 13.2 per cent in the third quarter of 2023 to 18.1 per cent in the first quarter of this year.

JLL said this was “the largest increase recorded since the onset of COVID-19 in Q3 2020”, and it was the “highest vacancy rate among all tracked Adelaide retail high streets”.

“Most of the attrition was recorded in the night-time economy sector with five night-time venues closing operations over the last six months,” JLL’s Adelaide Retail High Street Overview report reads.

“Long-standing venues Red Square and Enigma Bar stopped trading. Additionally, the Super Cali/Converge/Juice Box nightclub, Precinct nightclub and Vice Bar all closed.”

The vacancy rate on Hindley Street is also well above other high streets tracked by JLL; the second-most vacant high street in Q1 2024 was O’Connell Street with a rate of 9.3 per cent – nearly 10 percentage points busier than Hindley Street.

It was followed by Rundle Street with a vacancy rate of 6.1 per cent, Jetty Road at Glenelg with a rate of 5.5 per cent and King William Road at Goodwood with 5.5 per cent.

The two top-performing high streets in terms of vacancies were Prospect Road at Prospect and The Parade at Norwood which both recorded a vacancy rate of 2.6 per cent.

On average, Adelaide high streets recorded a vacancy rate of 7.2 per cent – up from 6.4 per cent in Q3 2023 – driven up by Hindley Street’s vacancy blowout.

Via JLL.

The report’s author Rick Warner told InDaily that it was “unsurprising” that Hindley Street was struggling.

Over the last couple of ABS retail trade prints, there’s been a significant decrease in consumer spending on discretionary retail categories in the age cohorts between 18-34 year olds. So, its really unsurprising that Hindley Street, which is almost entirely reliant on night-time economic activity from younger people, is struggling right now,” he said.

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However, the elevated vacancy along Hindley is concentrated on the area between King William and Morphett Streets. The West End, which is buoyed by the daily pedestrian foot traffic from UniSA and Adelaide’s BioMed City precinct, is still doing OK.

Conversely, other high streets with high concentrations of hospitality offerings that appeal to a wider range of consumers, like Rundle Street, The Parade, King William Street and Prospect Road are still tracking well. But these areas are also supported by a more diversified tenancy mix that includes fashion and daily needs retailing and services.”

It comes as Hindley Street is set for an upgrade soon, including wider footpaths, fewer car parks, tree planting, more garden beds and narrower roads under an Adelaide City Council plan.

JLL said inflation and increased interest rates “finally started to grip along Adelaide’s retail high streets”, noting that the moderate uptick in vacancy on average was “from an historical low” and is still below the medium-term five-year average of 8.9 per cent.

“Much like six months ago, occupier demand was mixed across the market, and for the most part, vacancy increases were marginal in many high streets,” the report said.

Retail trade growth in South Australia is slowing too, the report said, impacted by “persistent consumer staples inflation, increasing energy costs, and elevated interest rates”.

“However, consumers are proving resilient with spending levels in the state comparatively stronger than the rest of Australia,” the report reads.

“Looking at trends more granularly on a quarter-on-quarter basis, retail trade has been slowing in the discretionary categories of fashion and homewares.

“SA’s labour force remains stronger than long-term averages, which will be a positive for retail trade over the short-term.”

Warner added that Adelaide’s high streets were changing in line with consumer preferences.

More broadly, Adelaide’s high streets are evolving into destinations, comprising more restaurants, cafes and small bars, and less traditional discretionary retailers like homewares, furniture, and recreational goods,” he said.

This is the blueprint that we’ve seen in a lot of the most vibrant cities around the world, so it’s a good trajectory for Adelaide to be on.”

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