Makeover of the shopping mall

By Gill South

At the official launch of Westfield's Albany shopping centre on Thursday bands played and the carpark was jammed as people flocked to see the brand new mall and all its tempting upmarket boutiques.

They found public areas of a significantly higher standard than they were used to - people had their lattes in public seating areas with nice cloth seats and there were even flowers in the public toilets.

The "shotgun approach" to building shopping centres is gone - now it's all about keeping the customer happy, staying for a long time and coming back.

Are New Zealanders finally getting malls of the quality shoppers in Britain and the United States are used to? We don't have the glossy department stores to act as anchor tenants, but Westfield has found a solution to that. It is putting in oversized destination stores, such as a big Borders bookstore, a large JB Hi Fi outlet, and an oversized Whitcoulls.

In a nod to planners and to international trends, the Albany mall has more outward-facing shops, a departure from the closed environment of 1990s shopping centres.

This will be one of the new generation of bigger mixed-use shopping centres. As well as its 147 stores, it will have offices on the upper level and there is consent for some housing development.

Steven Lowy, group managing director of Westfield, believes the "internationalisation of retail" will be the key driving force for future shopping centres. Real estate has historically been "quite a domestic business, with domestic tenants", he says.

As the largest listed real estate group, by market capitalisation, in the world, Westfield operates in four markets: New Zealand, Australia, the US and Britain.

One of the A$42 billion (NZ$50.6 billion) company's most ambitious projects is Westfield London, being built at White City in West London.

Lowy confirmed that Louis Vuitton will open a boutique there - five years ago, such a luxury brand wouldn't be seen dead at a shopping mall.

Louis Vuitton has had a relationship with Westfield for a while now, an advantage of being international, says Lowy.

Another advantage of Westfield's global reach is that it can use its intellectual property (IP) in every place it operates.

The lavish San Francisco Westfield food hall is an example, says Lowy. "The foodhall is a product that we developed at Bondi Junction in Sydney then it went to Century City in LA and Westfield San Francisco is the third one."

These new foodhalls include a foodmarket selling everything from bakery goods to sushi. And they have a range of better-quality restaurants, some selling alcohol and with non-plastic seating areas.

The tenant mix of malls is set to become increasingly sophisticated, he says. "We look at the integration of fashion, food and leisure. A fashion mall is not just fashion stores but ones like Swarovski and L'Occitane. You could put a Chanel or an Estee Lauder in."

While internationalisation is "sexy and exciting," says Lowy, it has to be done within the appropriate local planning structure. And land availability drives a lot of these issues.

"With a $210 million investment [at Westfield Albany] we are looking at a very long-term view and that view is based on a sound planning system."

Trevor Mackie, manager of environmental policy and planning at the North Shore City Council is keeping a close eye on Westfield Albany and its development. His concern is that rather than shopping centres being destinations in themselves, they should integrate more with the environment.

The council doesn't want to see acres of carparks surrounding shopping centres, separating them from the life going on around them.

"How do you fit in with the rest of the community? We want shopping centres to work a lot harder with their surroundings," he says. Mackie wants people to be able to walk to Westfield Albany and hopes it won't "lapse into a business park mall".

"We can't afford to have all our retailing happening away from where people live." It's all about "knitting" malls into the city fabric. "For Albany, I want more than a town centre, I want a city centre."

In stark contrast to this mixed-use development, "town centre shopping centres" such as those in Britain, where you almost stumble across the complex on the high street, will be a future trend. Mackie hopes that the overseas revitalisation of town centres will be mirrored on the North Shore in places such as Glenfield, Milford and Birkenhead.

"I think they've got to play a stronger role in accommodating growth," Mackie says. "They might have been seen as being a little bit in decline."

Meanwhile IMF Developments has plans for improving the Milford shopping centre.

Josephine Grierson, the entrepreneur who dipped her toe into retail with Northcote's Fox shopping centre, is interested in the trend of "de-mallisation".

"You take existing large-scale shopping malls and try and turn them back into a town centre. It is a growing trend in the States," she says. "A shopping mall like Milford would adapt well to this technique. If I owned Milford shopping centre, that's what I'd be doing."

"Lifestyle shopping centres" are also gaining traction overseas in cities.

While most shopping centres are aimed at the masses, these are smaller shopping centres, targeted at a more defined group.

"The Grove" in Los Angeles is a good example. Built along the lines of a fantasy Italian town, it has large lifestyle destination stores such as Apple, Borders and Nike strategically placed along its winding lanes.

It's difficult to get away with lifestyle centres in New Zealand, says John Long, director of Retail Consulting Group, the property and design consultancy behind Westgate in Auckland and Fraser Cove in Tauranga. "Chancery shopping centre in central Auckland is a good little centre, but it does not have the brand power and the scale," he says.

With all this development going on, is New Zealand in danger of being overshopped? According to Long, our shopping space per head is still significantly lower than in Australia.

"Overshopped assumes that there's only so much money to be spent on shopping. It's more about people's lifestyle choices," he says.

Whatever developers decide to build next, Jennifer Manning, senior manager NZ for AMP Capital Shopping Centres, says it is going to be all about competition for the end product.

"The trend is about being smarter and creating a point of difference," she says. "At Botany Town Centre, we are an integral part of the community. Because we are a town centre, we can offer [things like] a library, a doctor. This creates a point of difference with Sylvia Park."

She predicts a lot of change will come from the retailers themselves as they redefine their customer service. Howard Storage, for instance, sends a consultant to your house to come up with storage solutions while Freedom Furniture offers an interior design service. This kind of thing will increase.

As with all business, sustainability will be at the forefront. "Carbon footprint [is something] we wrap it into everything we do," she says.

In Australia there is one shopping centre that recycles 100 per cent of its waste, says Manning - something for New Zealand centres to aspire to.

John Albertson, chief executive of the Retailers Association, says that at international retail conferences the focus has turned to the customer and customer focus.

And as sustainability grows in importance, the actual buildings will become more "clever".

As for retailers, they believe in the future shoppers will be drawn to more individual stores in terms of design, looks and feel.

Angus McNaughton, chief executive of Kiwi Income Property Trust, owner of Sylvia Park and other shopping centres, says shopping centres are and will be for the time poor. "[They are] a place where can they go to get rid of the guilt of not spending time with their family," says McNaughton. And the mixed offer of leisure and retail will have something for everyone.

But once centres are built, they cannot rest on their laurels - shops will have regular new fit-outs to create interest. "Things have to be changing, people want to see things changing," says McNaughton.

"The consumer is reasonably fickle," says Clive Mackenzie, General Manager, Development at Westfield. "It's up to retailers and landlords to regenerate these buildings, revitalise them, otherwise the market moves on."

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