Rise of dark kitchens to be lasting legacy of COVID-19, CBRE says

Heather McIlvaine

14th Apr 2020

Global real estate giant CBRE believes the growth of online meal delivery sparked by social distancing restrictions due to the coronavirus will lead to a lasting rise in the number of dark kitchens in Australia.

Dark kitchens are shared spaces where multiple restaurants can prepare meals for delivery only. They are typically located in the backstreets of high-density, inner-city areas, where meal delivery is in high demand.

Global providers include Karma Kitchen, CloudKitchens, Kitopi and Deliveroo, though Deliveroo is the only multinational provider operating in Australia, with four dark kitchen locations locally.

But as more restaurants turn to delivery to survive the restriction of eat-in dining, and experience the benefits of dark kitchens, CBRE expects the number of both dark kitchens and dark kitchen providers to boom.

The company has released a new report, Australian Online Meal Delivery & Dark Kitchens, in which it predicts the APAC market for dark kitchens to be worth around US$700 billion by 2021. It expects the US market to be worth around US$1 trillion.

“This is a great addition to traditional bricks-and-mortar hospitality offerings,” Leif Olson, CBRE Australia’s director of retail leasing, said about the growing dark kitchen trend.

“It’s a low-cost rental option that takes pressure off the bottom line and enables food providers to put product in front of a wider customer pool.”

It has also breathed new life into distressed real estate assets such as car parks and abandoned strip malls.

Olson noted that an increasingly popular trend is to fit-out an array of 20-foot containers with commercial kitchen equipment on a central, inner-city site.

According to CBRE, Australia’s online meal delivery market has grown at an average annual market rate of 76 per cent over the past five years, with revenue expectations of approximately $872 million this year and over $1 billion in 2021.