The changing face of Hastings Street

Hastings Street has long been the jewel of the Sunshine Coast – a vibrant meeting place for locals, a desirable tourist destination and a place where investments deliver reliable returns. But the current demand for commercial space is like nothing ever seen before.

Border closures, interstate migration and unprecedented interest from businesses keen to set up shop in regional areas has set the scene for an altered commercial mix across Noosa’s prime Hastings Street strip.  

This dynamic environment, coupled with greater economic certainty, has increased demand for A-grade commercial spaces, hospitality premises and properties with the potential to be converted to food and beverage.

Consistent with the picture seen across a handful of other regional areas, investors are keen to snap up lucrative commercial opportunities in Hastings Street and beyond.

FOOD GLORIOUS FOOD

Hastings Street has always been known for its focus on food. Most current enquiries fielded by Ray White Commercial Noosa and Sunshine Coast North are for hospitality premises including restaurants, bars and hole-in-the-wall type café operations.

“One of the reasons food has bounced back before retail is simply the ability to get stock,” says Ray White Commercial Noosa and Sunshine Coast North co-principal Paul Butler. “Food has experienced a better consistency of supply throughout the pandemic which retail has struggled to achieve due to dependence on stock from overseas.”

“As a food bowl and food destination, Noosa attracts some of the best chefs and restaurateurs, which builds our reputation and fuels demand,” Paul said.

Between 2015 and 2021, food retailing along the strip increased from 26.38% to 34.26%, according to a study conducted by Ray White Commercial. The street now boasts 18 cafés and restaurants, 12 specialised food retailing outlets such as delis, and two supermarkets.

Current opportunities include the well-positioned 5/30 Hastings Street, which was previously home to O-Ren Brewhouse. The popular restaurant has just moved to bigger premises at Sunshine Beach and two strong contenders are already vying for the space.

CONVERSION OF PREMISES INTO FOOD & BEVERAGE

Securing suitable premises continues to be a challenge for hospitality businesses keen to get in on the Hastings Street action. The need for grease traps and exhaust outlets, limited areas licensed for outdoor dining and a concentration of smaller footprints mean new players need to get creative.

Getta Burger co-founder Brent Poulter’s latest brainchild Cach Song converted a long-held fashion retailer at 3/18 Hastings Street to a colourful, retro takeaway café offering cold brew coffee, gelato, Bánh mì and cold-pressed juices.

Growing global franchise Oakberry Acai snapped up the former Jets Swimwear premises at 9/32 Hastings Street late last year, a highly sought after location with consistent foot traffic at the northern end of the street.

Boutique coffee and gin bar Moonstruck moved in at 4/5 Hastings Street before COVID-19 hit. The lovechild of Noosa locals who knew they were onto a good thing when they purchased the former clothing shop, Moonstruck joins Miss Moneypenny’s and Piccolino Italian to amplify the vibe at the street’s western end.

NATIONAL AND INTERNATIONAL RETAIL INTEREST

Clothing and soft goods have always dominated Hastings Street and despite the impact of online retailing and hospitality sector growth, continues to occupy 37% of floor space. That’s a drop of just 4% compared with 2015.

Over the past two months, there has been significant interest from luxury brands seeking to enter the market.

“National and international retail operators are pinpointing positions they may be interested in and proactively searching for opportunities,” says Paul Butler. “These operators are pursuing a regional presence to capitalise on the tourism boom. Combined with the increase in permanent population, they’re now seeing Noosa as an economically viable location.”

“International brands are looking for high-end properties with the potential for quality fit-outs. They know that to offer a great retail experience, they have to create that luxury feeling, so substantial volumes, high ceilings and a central location are essential. Good quality tenants are out there looking for good quality properties,” Paul said.

While many seek a tenancy opportunity, others are willing to purchase to secure a more permanent presence.

INVESTMENT RETURNS

Hastings Street has always been tightly held. Assets on average only come to market every 12.74 years, with some held for more than 30 years. While there has been little transactional evidence this year, good premises continue to sell in the sub 4.75% yield range for vendors.

This year we have seen several new leases in the 35-200 square metre range, with food retailing achieving premium rates. Recent deals represent net face rents around $2,500-$3,750 per square metre with an average term of five years.

ALTERNATIVE MARKETS

Fortunately, there are plenty of exciting alternatives for businesses or investors keen on Hastings Street that can’t get into the market.

Noosa Junction is becoming known as a destination in its own right, with an eclectic mix of bars, cafés, coffee, live music, markets and street art. A favourite with the locals, the Junction is more affordable, with greater outdoor dining potential and grease traps already in place on many premises.

Paul believes there is a market for every operator at the moment, whether in Noosa Junction, Coolum Beach, Peregian Beach, Sunshine Beach, Noosaville or one of the other local villages.

“There are loads of opportunities along the coastal strip. Each location has unique features and benefits that may suit the requirements of individual businesses or restaurants. A great breakfast and burger restaurant, Messy Hen, took up a lease in Town of Seaside at Marcoola late last year and they are killing it down there,” Paul said. 

“The influx of people from down south with loads of experience in hospitality or retail, combined with existing local businesses and innovative local startups are bringing a new sense of vitality to local precincts.”

For a complete snapshot of the current retail mix of Hastings Street compared with 2015, check out Focus on Hastings Street by the Ray White Commercial research team. Download the report here.

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Credit: Twilight Night photo, Noosa Junction @florencelemyre