Driverless cars could save suburban malls from the Amazon threat by allowing smaller shopping centres to turn car parks into community facilities and by turning car journeys into productive time.
At a time when the online juggernaut is poised to hit the Australian retail economy and analysts predict prices and the value of retail leases to fall, the arrival of autonomous vehicles could give a much-needed boost to smaller shopping centres in particular, says JLL’s Australian property and asset management head Richard Fennell.
By freeing up space currently allocated to parking – autonomous vehicles will greatly cut the need of malls to provide parks for customers who drive themselves there – even smaller ones will be able to repurpose space for facilities that will turn a shopping centre into a place that offers an experience, rather than simply meeting a need to consume, said Mr Fennell, the co-author of new report The Human Revolution.
Changing commuter expectations hint at the change to come. By 2030, just 16 per cent of people expect to drive themselves to work compared with 66 per cent who do so currently and this will alter the way people travel to and regard shopping centres, Mr Fennell said.
“It will potentially unlock all that underutilised real estate wasted just to get people to and from that shopping centre,” he said. “They’re improving their centres to be more community-facing and place-making, more food and beverage-oriented. They still want to sell you stuff when you get there but they want to get you there to do other things.”
Brian Haratsis, the chairman of consultancy MacroPlan Dimasi as well as of the Australian Driverless Vehicles Initiative, agrees. In a recently published book, Autropolis: How and When Automated Vehicles Will Transform Australia and Why it Matters, he predicts that autonomous vehicles could account for 100 per cent of new vehicle sales as early as 2055, and argues that property development will be one of the first sectors affected by self-driving cars.
Mall owners will, for starters, be able to fit in cars that park themselves in less space, Mr Haratsis said.
“That is being planned in London and the US right now,” he said. “Shopping centres could be major beneficiaries. This could counter-balance the Amazon effect.”
Westfield Corporation did not respond to a request for comment.
Not all local malls would benefit, however, Mr Fennell said.
While theoretically all shopping centres could repurpose parking space with community facilities, the greater efficiency of movement that would result from AVs – such as faster trips and less congestion – would also make it easier for people to get to a further mall than the local one they might typically go to now out of convenience, he said.
“You go to neighbourhood centre because it’s local,” Mr Fennell said. “But if you [have] a bigger one and its only five to 10 minutes more, you may go past your local one to a bigger centre.”