A foodie hotspot can boost local real estate development as well as grow its tourism, retail and hospitality sectors, according to a JLL report.
Look at what is happening in South Australia, it adds. The state’s booming wine exports have put its once-sleepy capital, Adelaide, on the world tourist map, according to Rick Warner, strategic research manager for JLL Australia.
After all, South Australia accounts for 61 per cent of Australia’s total wine exports, and in 2017, achieved its highest global sales in 10 years. China took the lion’s share, recording a 51 per cent year-on-year increase in the 12 months ending March 2018.
Official data also shows international tourist numbers have reached record levels, with visitors from China the fastest-growing and the biggest-spending sector. Last year, their spend in South Australia rose by 74 per cent and China is now the state’s second-largest visitor market behind Britain, having overtaken the US, according to the Ministry of Tourism.
With Adelaide part of the exclusive Great Wine Capitals global network, alongside regions such as Bordeaux, Rioja, Rheinhessen and Porto, Warner believes the city’s gourmet offerings are a key driver.
“Year-on-year retail spending growth in the cafes and restaurants category has been in double-digits since mid-2016,” he says. “It’s all about food and wine down here.”
Sophistication dominates. While annual growth in fast food spending sits below 3 per cent, fine dining restaurants such as Orana (voted number 1 in the 2018 Gourmet Traveller top Australian restaurants), Africola, Shobosho and Oggi Osteria are all highly lauded, Warner says.
“Hentley Farm, the d’Arenberg Cube and Fino Seppeltsfield in the wine regions are also major culinary drawcards,” he adds, citing the positive impact of wine alone on Adelaide’s real estate “is huge”.
The major noticeable impact is the massive construction pipeline of new five-star hotels scheduled for the city, Warner explains. The 257-room Sofitel Hotel on Currie Street and the new 326-key Crowne Plaza Adelaide hotel on Frome Street are both expected to be finished in 2020.
“Marriott’s Westin brand will manage a new 285-room five-star hotel adjacent to Charter Hall’s office tower on the heritage-listed GPO site on Victoria Square, while the [Atura Adelaide Airport hotel] is expected [to open] by the end of this year,” Warner says. “SkyCity Casino is expanding its hotel offering as part of a A$330 million [HK$1.92 billion] casino upgrade currently under construction.”
Emulating the success of Melbourne’s famous laneways, the Adelaide City Council has launched a Laneways Master Plan, involving the refurbishment of the laneway network from Riverbank Precinct along North Terrace, through to the Adelaide Central Market in the city centre.
“This new hospitality and retail spine will become a new focus point for Adelaide’s night-time economy with vendors expected to capitalise on the current retail spending environment,” Warner says.
At the grass roots production level, he believes the increase in wine exports has been the catalyst for improved industrial occupier activity in 2017, with a number of expansions within the bottle manufacturing sub-sector announced in the past 12 months. The larger bulk and bottled wine volumes and agricultural products requiring delivery from the regional wine areas [of Barossa, Clare, McLaren Vale, Coonawarra and the Adelaide Hills] and greater rural production lands in South Australia will increase the demand from third-party logistics companies that support the industries, Warner says.
As for residential property, all of the most recent high density towers are going up in and around the food hot spots of East End and Chinatown/ Central Market precincts.
Notable developments under construction include Realm Adelaide on Austin Street and Adelaidean in Frome Street, both vying for the title of Adelaide’s highest and most luxurious and tower; East End designer flats over Rymill Park in the heart of the city; and Monument East, a boutique development of 74 luxury flats above the central business district corner of East Terrace and Rundle Street. For commercial and residential tenants and owner-occupiers, a major unspoken draw is “the coolness factor”, Warner says. “Efficiency and quality of the building is paramount, but proximity to amenity also plays a major role,” he says. “Quick access to restaurants and bars is a major drawcard.”
JLL’s report also links food hot spots to real-estate development in the Damansara Heights suburb of Kuala Lumpur, where trendy restaurants and cafes “form a key part of its appeal for residents and visitors” says JLL Malaysia head of research Veena Loh.
This trend has boosted the lifestyle credentials of developments such as Damansara City, which includes a new Sofitel hotel, office towers, a food-and-drink-centric mall and Aira Residence luxury flats.
“It’s a journey,” Loh explains. “You need a sufficiently large population to support the food and drink openings, and once a new neighbourhood has matured, more new residents will move in because of the high-quality local amenities.”
The JLL report also cites Hong Kong, where the leasing market “has become much more accommodating towards F&B operators” during a three-and-a-half-year-long retail slump, according to Cathie Chung, research director, JLL
Last year, F&B operators accounted for about 66 per cent of all international newcomers, compared to about 51 per cent in 2016, she says.
“The presence of high quality F&B outlets increases the attractiveness of a location as they act as complementary facilities for property developments such as hotels, offices and residential developments,” Chung explains.
“Places well-served by restaurants in general increase their attractiveness as a living and working location,” she adds. Examples of new residential developments close to dining hot spots include Victoria Harbour in North Point (due to be completed in 2018 and 2019) and Cetus Square Mile in Tai Kok Tsui, which is due next year.
What you can buy for A$400,000 (HK$2.32 million):
A two-bedroom flat in Adelaide’s East End Apartments, a complex under development offering views of the city, parklands and the Adelaide Hills. Residents share an elevated, semi-open-air urban lounge for relaxation and entertaining, and electric vehicle-friendly parking – a first for Adelaide flats.
What you can buy for 1.3 million Malaysian ringgit (HK$2.51 million):
A newly completed one-bedroom flat in Damansara City Residency, Kuala Lumpur. The 938 sq ft freehold flat with balcony is next to Damansara City shopping centre, and close to two MRT stations.