Bank Branches, Beauty & Bubble Tea 2023 Report

The high streets of Sydney are changing. Although Sydney has seen strong population growth of 1.8% over FY23, the demands from customers and the customer experience is changing. Whilst banks may be consolidating their premises, other retailers are being presented with new opportunities to obtain prime retail leases.

What does this mean for bank branches, beauty and bubble tea?

Online banking has evolved over the years to an extent where almost all personal banking activities can be completed on a device. Consequently, the necessity for banks to have a physical presence has reduced. Many of the top Australian banks now place emphasis on larger and more centrally located branches, resulting in the leasing of flagship style floorspace on Sydney’s major strips.

The Australian beauty industry has seen steady growth over the past decade. The cosmetics segment is expected to reach AUD 5.9 billion by FY28. A key driver has been e-commerce, with online cosmetic and perfume sales projected to top AUD 3 billion by FY28. Despite the beauty industry being significantly fragmented in Australia, major beauty brands are shifting from brand aggregators to seeking standalone stores in high foot traffic areas.

The bubble tea market still has strong growth potential due to Sydney’s rapidly rising population. Sydney is forecast to add 1.02 million residents by 2032, largely driven by migration from East Asian countries where bubble tea is highly popular. The high level of leasing enquiry from bubble tea brands proves that the category has not reached market saturation, with significant room for further expansion.

This report explores the involvement of these three key trends in shaping Sydney’s retail market.