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Driverless cars set to reshape shopping malls

Property landlords are planning for the day when the concept of driverless cars like Mercedes’ F015 becomes a reality. Photo: Scott Legato Autonomous cars like this Google design could radically alter the look of suburban shopping malls. Photo: Google

Space used for car-parking could be reallocated to house more shops, or for new facilities like drop-off zones. Photo: Wayne Taylor

One of the biggest issues facing property landlords in coming years will be the concept of driverless cars.

Uber has predicted they will operate driverless cars by 2030 and many car manufacturers are also making similar suggestions.

But given the length of time in planning and developing property, such as shopping centres, hotels, office blocks and large-scale warehouses, the concept is now firmly on the agenda.

All the major land owners have said it is an issue that will change the dynamics of the commercial property sector. Whether that is adding more pick-up and drop-off zones at a mall and using the car parking areas for other uses, or building an office tower with very few car parking bays – something which is already happening.

Angus McNaughton, chief executive of Vicinity Centres, which is developing the massive extensions at Chadstone shopping centre in Melbourne, raised the issue at the group’s interim result last month.

“Uber recently announced that they will be completely driverless by 2030. So what does that mean for shopping centres where car park provision have to be so proximate to retail for convenience?” he said.

“It opens up all sorts of opportunities and our focus is really to try and look at what sort of changes will happen … as it is a lot closer than people think and we are making sure we’re planning our assets for those opportunities.”

According to agents who will be leasing the sites with the property landlords, the impact will be significant.

Luke Dixon, associate director of research at Colliers International, says for retail, at regional, sub-regional and neighbourhood centres, the allocation of space required for car parks may be greatly reduced and allow that space to be used for alternate purposes.

“Instead of having car parks, there can be drop-off / pick-up zones, which means that landlords could effectively greatly expand their gross lettable area (GLA) development applications permitting, to increase rental revenues,” Mr Dixon said.

“There is also the option for retailers to provide deliveries for consumers, much like Uber is starting to provide, although there will be costs involved. Click and collect shopping may also be expanded seeing as the “collection” aspect of shopping could become easier.

“Shopping centre infrastructure may be tailored to facilitate this.”

Peter Allen, the chief executive of Scentre, which owns and manages the Westfield shopping malls in the country, says driverless cars are certainly going to change the way we commute.

“It is about making sure we future-proof our malls,” Mr Allen said. Shopping centres have long devoted vast amounts of space for car parking. Photo: Robert Peet

“We are looking at a range of measures from valet parking and extending the drop-off and pick-up zones. Our car parks are also able to be modified by taking out a level where necessary and converting it to retail space or for another use.”

While the practicalities of driverless cars are being worked on it is assumed that once a vehicle has been used, another customer can order it, so there won’t be space required for parking.

“Stockland is not only keeping a close eye on innovation and changing trends within the automotive and transport industry, particularly with the rising popularity and decreasing costs of car share services, such as GoGet, it is also helping to ‘drive’ real and substantive changes in its design of  shopping centres and the types of services it provides today.”

John Schroder, chief executive of Commercial Property at Stockland, said the group is already doing its bit to encourage and support environmentally-conscious customers by introducing the facilities that enable them to plug in and charge their electric vehicles (EV) for free while they shop.

“We’ve already introduced free Chargepoint EV charging stations at Stockland Point Cook Town Centre in Victoria and at Stockland Balgowlah, Stockland Cammeray and Stockland Glendale in New South Wales, and the response from customers has been extremely positive,” Mr Schroder said.

“We place a high emphasis on the environmental performance and sustainable design and operation of our 41 centres throughout Australia, so ChargePoint is a perfect fit for our retail portfolio.”

Mr Schroder said that across the Stockland portfolio of shopping centres, it always ensures there is ample parking for the everyday convenience of customers.

“There is an obvious cost to dedicating so much real estate to car parking, and we are also consciously designing our new centres to ensure we provide generous drop-off and pick-up zones, which could play an integral role in future years if driverless cars become more prevalent or, at the very least, so that we can provision spaces for other emergent technology applications, such as ‘click and collect’ retailing.”

For offices, hotels and industrial property, it will also mean car parks will become obsolete, according to Mr Dixon.

“The extension of the ‘agile workplace’ is a key theme of the past few years that our leasing teams have been witnessing,” Mr Dixon said.

“It may also solve the issues encountered with companies sending home employees after hours safely. The may have their own driverless car-pooling system / subscription.”

The hotel sector, which already has the drop-off / pick-up zones may see subscription car services (like Wi-Fi packages) that can act as transfer or tour services.

“Perhaps even on a tiered package. It may be a point of differentiation between competitors,” Mr Dixon said.

In industrial warehouses which need transport, driverless cars may see increased road efficiency and faster delivery times, meaning distribution centres can now be located further from CBDs and still retain their utility. This will have a huge impact on valuations of land and facilities.

“Rather than talking about auto picking systems, we’re now talking about an end-to-end system that takes orders, picks and delivers. This will allow businesses to further automate and invest in long term cost advantages. Think about lack of human error, delivery time guarantees,” Mr Dixon said.

This story Administrator ready to work first appeared on Nanjing Night Net.

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