Since the pandemic, one of the biggest changes we have seen in the industrial commercial property market is the rise of dark kitchens.
When this model first arrived on the scene, there were sceptics. However, the proof is in the pudding and the fundamental shift in consumer behaviour, such as 900,000 meals being ordered on fast-food delivery apps, has sparked a rise in this sector recently.
Dark kitchens cut costs and boost turnover. These spaces are cheaper than a traditional restaurant as the units are much smaller and do not accommodate dine-in guests, so costs such as table linen, crockery and waiting staff costs are not a factor. It is not only restaurants that are reducing kitchen space; hotels and private members clubs are also doing so for the opposite reasoning – to accommodate more dine-in guests at their establishments.
Dark kitchens can be a useful experiment for brands to test a location to see if there is appetite for a larger presence. Shorter leases offer them time to ‘tap into’ a market while still growing.
From a development perspective, dark kitchens can have a higher site density than the traditional urban logistics model and therefore can maximise value for investors and developers. The sizes range depending on the operation and are typically only 5,000 sq ft for standalone brands, to larger companies taking up to 50,000 sq ft. Dark-store players such as Gorillas and Getir are based in densely populated areas and construct their network to reach a targeted amount of people faster.
With an increase in ‘cloud kitchen’ operators such as Jacuna, buildings can now be divided into multiple units and rented to smaller businesses. These operations can also help brands reduce their real estate and labour costs in exchange for higher profit margins.
Dark kitchens are certainly not the end of bricks-and-mortar restaurants. Many brands still require a physical presence and only open a delivery option to meet the needs of today’s customers. There is no doubt that the pandemic accelerated this change, and for the sceptics dark kitchens are here to stay.
Georgia Pirbhai is associate director, industrial and logistics at Colliers
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