Across Australia and NZ, Scentre has interests in 40 malls and 11,700 shops and it has total assets under management of A$42.1 billion. Photo / Chris Gorman
Across Australia and NZ, Scentre has interests in 40 malls and 11,700 shops and it has total assets under management of A$42.1 billion. Photo / Chris Gorman
Growing demand and a strong economy see number of outlets booming.
Predictions of the demise of the shopping mall appear to have been exaggerated - across Auckland, retail centres are being bought, sold, built and expanded in a surge of deals worth $1 billion-plus.
Internet shopping's popularity was thought to be a threat to big-box shops.
After Jean Jones' owner CozicanInvestments and Shanton Fashions went into liquidation, and Identity hit receivership, Greg Harford from RetailNZ said online shopping was a big part of the pressure on local stores, particularly given the strength of the New Zealand dollar until recently.
But a slew of big deals have emerged across Auckland which will see the number of shopping outlets balloon, from Westgate Town Centre across to LynnMall and the central business district's Downtown.
Malls are expanding on the back of growing demand for shopping, fed by what has been a strong economy, with high employment and rising house prices.
"A market on fire," says Colliers International in its latest retail research Mega shopping malls get a roll on People want to go and participate in society.
Retail has gone way beyond just wanting to buy, but it's also to do with food, hospitality and entertainment.
Campbell Barbour The new Westgate Town Centre.report, citing record vacancy lows and steep demand.
Tiffany and Chanel are coming to Britomart, Precinct Properties will soon knock down and upsize the CBD's Downtown and previously secret plans for Takapuna's smallish 1.3ha Shore City have now emerged.
When news broke this week of the new monster NorthWest mall, Herald readers argued on Facebook about the benefits of retail therapy, with some saying we already have too many shops and questioning the emptiness of a consumer culture.
"When has a mall ever benefited a community? "Every time all the store's income goes into paying for their lease instead of staff wages," one reader complained.
"CONSUME MATE & DIE," shouted one contributor.
"If only there was some way you could buy things electronically. Like an internet- based shopping experience. Oh wait," said another.
Across Australia and NZ, Scentre has interests in 40 malls and 11,700 shops and it has total assets under management of A$42.1 billion. Photo / Chris Gorman
At issue are the reasons for building the $160 million 2.7ha NorthWest opening on October 1 and being developed by DNZ Property Fund, whose chief executive Peter Alexander said the centre would reflect the west architecturally with sand and dappled light.
Campbell Barbour, chairman of the Council of Shopping Centres and general manager of retail developer NZ Retail Property Group which owns the land where NorthWest is rising, said the internet's effects on shops had been overstated.
"People want to go and participate in society," Barbour said.
"Retail has gone way beyond just wanting to buy, but it's also to do with food, hospitality and entertainment," he said.
"People like people and while I find the internet is an excellent place to become informed, aware and be product-aware, the joy of purchasing and being assisted personally is worthwhile and people enjoy it," Barbour said.
"People go to shopping centres to recreate, to people-watch, mix and mingle." Despite the forecasts of online buying killing shopping malls, investors are showing increasing confidence in bricks over clicks.
Just this week, Kiwi Property agreed to spend $82.5 million on 2.7ha of new floorspace at the new $1 billion Westgate Town Centre, purchasing Zone 7 where stores are rising for Harvey Norman, Briscoes, Rebel Sport, Freedom Furniture and Hunter Furniture.
Colliers International's latest retail research report summed up activity: "The level of demand for retail space in Auckland CBD, the suburbs and shopping centres symbolise a market on fire.
"Retail spend will be driven particularly by rising house prices and real wage growth. Developers have upped the ante to satisfy demand."
Chris Dibble, Collier's national research associate director, said Auckland's average retail prime net rents are $1118/m2 and rising.
"Auckland region's 2.4 per cent [retail] vacancy rate is the lowest since late 2007.
"Demand has grown steadily from retailers looking for opportunities to take advantage of the rise in Auckland consumers' buoyant mood," Dibble said.
Barbour says that a decade ago, Westfield - now Scentre - dominated Auckland's mall scene and although that business still has nine malls, the hierarchy has changed and alternative owners dominate.
Kiwi Property has Sylvia Park towards the south, NZ Retail Property has Westgate on the northwest, Precinct Properties controls Downtown in the CBD and Scentre controls Westfield Albany.
"We don't have too many shops but we might not necessarily have them in all the right places," Barbour said.
He cited the need for growth in under-supplied areas such as the west which has only 0.44sq m of retail floorspace per resident, well below metropolitan Auckland's 1.5sq m.Institutional investors have fretted over Scentre's value writedowns at a time when retail is booming.
They are also wondering who might buy Shore City after Asia's Aviva put it on the market, along with an information memorandum showing huge redevelopment potential - a far bigger podium with more shops and a twin-tower apartment development above, all up more than 9ha of floorspace.
Aviva is selling Shore City because JP Morgan Asset Management bought Aviva Investors' Asia Pacific direct real estate investment platform.
In its latest accounts, nine-mall owner Scentre Group wrote down the value of Westfield Glenfield, Hamilton's Westfield Chartwell and Henderson's Westfield West City.
The group's chief financial officer Mark Bloom explained: "Scentre Group values their shopping centres in accordance with our accounting policies."
