A wave of expansions at Perth’s major shopping centres is heralding the next generation of retail experience, as owners rise to the challenge of online competitors by expanding their footprint and broadening their offerings.
According to property information and research company Y Research, shopping centre developments across metropolitan Perth will top the $5 billion mark in the five years to 2021.
Y Research principal Damian Stone said the current wave of developments was the largest in WA’s history.
“Due to former state government legislation that capped major regional shopping centres at 80,000 square metres, most have not expanded in two decades,” he said. “As a result, the comparative size of these centres fell dramatically behind the rest of the country.”
But the introduction in 2010 of a policy to promote activity centres allowed shopping complexes to expand if they added mixed-use elements such as housing, healthcare, entertainment and community facilities.
“The recently completed redevelopments of Carousel and Mandurah Forum are at the forefront of this wave of major redevelopments that will see the evolution of centres such as Midland, Karrinyup, Garden City, Innaloo, the Galleria and Cockburn Gateway,” Mr Stone said.
“Over the next five to 10 years as these projects are completed, the retail offering in WA will change completely. Major shopping centres are evolving to become more than simply places to shop.”
They were now offering public spaces where people could meet, eat and be entertained. The inclusion of non-retail spaces, such as childcare centres, gyms, medical facilities, offices and apartments, would be key.
In Booragoon, AMP Capital is gearing up for a three-year, $750 million redevelopment of Garden City, which will see the centre grow from 72,000 square metres to about 120,000 square metres, with the number of stores doubling to 370.
AMP Capital is also in the midst of an $800 million revamp north of the river, at Karrinyup Shopping Centre, which will expand from 59,874 square metres to 109,000 square metres, and include an al fresco dining precinct, main street and Hoyts cinema.
This development will also incorporate 134 residential apartments, embracing the international trend for “retail living”.
“Combining shopping, dining, entertainment and living is something that’s still new in Perth,” Mark Kirkland, managing director of AMP Capital Shopping Centres, said.
“Customers will enjoy carefully curated shops and high-quality dining experiences that they can share with friends and family,” he said. “Unique events, art, leisure and entertainment will keep the centres alive from day to night, along with providing customers a range of facilities that focus on health and wellbeing.”
Hawaiian is focused on keeping its 10 Perth shopping complexes, including Claremont Quarter, at the centre of people’s lives.
“We believe that there’s an evolving role for shopping centres to become a natural extension of the local residents’ lifestyle,” said Scott Greenwood, Hawaiian’s general manager, shopping centre suburban portfolio.
“We expect to see continued growth in fast and casual dining options, an increase in health and wellness offerings and other unique services such as the education and community sectors. Our centres are now activated from early morning until late at night.”
Scentre Group will pump at least $1 billion into the redevelopments of Westfield shopping centres in Perth between 2017 and 2022.
John Papagiannis, director leasing and retail solutions, said changing customer expectations were reflected in the increasing amount of space that offered experiences. “In 2018, more than 35 per cent of space across our platform offers experiences that our customers consume on-site, such as restaurants, beauty and entertainment,” he said.
The latest project is transforming its Innaloo location into a “premium lifestyle destination” called Westfield Stirling. The $830 million redevelopment will result in 368 retailers over 106,000 square metres.
“Westfield Stirling will be a vibrant village destination with something for everyone all under one roof, from Oswald Street’s dining, beauty and wellness offering, to the fresh-food market boasting the best of WA’s local produce, a fashion mall housing premium local and international fashion brands, and a fully immersive rooftop with an unrivalled dining, entertainment and cinema precinct,” Mr Papagiannis said.
This follows last year’s relaunch of Westfield Carousel after a $350 million revamp, which saw it take the mantle from Lakeside Joondalup as WA’s biggest shopping centre, at 109,650 square metres. And at Westfield Whitford City, a new dining and entertainment zone was the centrepiece of an $80 million redevelopment unveiled in late 2017.
According to Lease Equity managing director Jim Tsagalis, many of Perth’s shopping centres have been ripe for transformation for a while. “Perth still doesn’t have anywhere near the square meterage of retail to population that exists in other capital cities,” he said.
The current expansion activity meant retailers were spoilt for choice. “They are looking at a plethora of developments and have to decide which are the best ones to go into,” Mr Tsagalis said.
“From a landlord perspective, the way deals are put together have changed – an element of the risk is now swayed towards the landlord and away from the tenant, in terms of incentives and rent structure.”
But Mr Tsagalis was cautious about the extent of expansion, particularly in the competitive northern corridor.
“As the economy grows, we’ll grow into what has been proposed,” he said. “But I don’t think everything will be developed in form and size proposed – or at least in the timeframe, so there won’t be as much supply as has been mooted.”
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