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Home / Business

Store wars: smaller, traditional NZ malls picked to die

Anne Gibson
By Anne Gibson
Property Editor·NZ Herald·
2 Jun, 2017 09:30 PM4 mins to read

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Plans for The Grove, a new food precinct set to open at Sylvia Park.

Plans for The Grove, a new food precinct set to open at Sylvia Park.

Smaller, more traditional suburban New Zealand malls face a challenging future, says a local retail expert, who backed an Australian report saying some malls could die in a decade.

Chris Wilkinson of First Retail Group in Wellington said malls still here get "millions" of annual shopper visits and plans are in place to expand many but those which are not updated would face a more challenging future and could eventually shut.

READ MORE: • Auckland malls in for super-sized renovations

"Food and beverage is the future and if centres don't adapt, it will get harder," Wilkinson said.

Brendan Markey-Towler, a Queensland University economic researcher, said smaller Australian malls would decline and could close in a decade, being replaced by apartment blocks.

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Wilkinson said much the same could happen here, with the gap was widening between big sophisticated malls such as Sylvia Park and more traditional smaller, tired-looking suburban malls drawing fewer people unless they were updated.

"New Zealand malls that are adapting to change and expanding their offerings such as food and beverage will continue to grow and prosper. But traditional older-style New Zealand malls that rely on legacy formats and don't adapt will certainly loose popularity and relevance. They will eventually falter and fail.

"St Lukes is one example of that, it's a tired format and the reason the owners have to spend millions of dollars is because that format is no longer engaging people as much as it was. People are getting tired of it due to the sameness of stores. St Lukes is in desperate need of improvement and if it wasn't improved, it would die," Wilkinson said.

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Sylvia Park, which attracts 12.6 million annual shopper visits, had now become a tourist attraction in its own right, "absolutely pumping" when big Auckland events are held, Wilkinson said.

ASX-listed Scentre Group, which makes more than $A1 billion annually from malls here and in Australia, has big plans for St Lukes, pushing it out to the north.

Campbell Barbour, NZ Council of Shopping Centres chairman, doubts predictions of the mall's demise.

"I don't think any small malls in New Zealand will die but they will evolve and change. There will be more services such as banks and more health and wellbeing offerings.

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"People think things evolving and changing is bad but things evolving and changing means they're growing. Retailing is a fast-changing dynamic sector. The group I represent remains upbeat," Barbour said.

Wilkinson said people's behaviour and spending patterns was changing.

"People are spending more time at home, they're on their computers or else in cafes and buying online," he said.

Yet New Zealand online retail sales still only account for 7.4 per cent of all sales in the latest period, he noted.

Big Australian malls with sophisticated food court, dining and cafe areas have semi-outdoor areas with extensive lighting and landscaping, and features such as fountains, fancy paved areas, he said.

He visited Queensland's biggest mall, Pacific Fair, recently and said he noted big changes there as it expanded, brought in new retailers and was upgraded.

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Other big New Zealand mall moves are:

• Precinct Properties' construction, now advancing, on its $850m Commercial Bay in the CBD with a 150-shop new mall

• NZ Retail Property Group expanding its Milford Mall and building apartments around it

• NZRPG's big plans for its Highbury, reviving the mall and adding many apartments above in the Birkenhead area on the North Shore

• NZRPG expanding Westgate in a project worth more than $1b

• Kiwi Property building new office blocks around Sylvia Park, and the new $9m dining lane, The Grove, due to open in December

• The 2015 opening of the 100-shop $160m NorthWest mall, Westgate

• Plans to expand Takapuna's ShoreCity, owned by Australian interests

• Plans by Asian GYP Properties to expand Pakuranga Plaza with more than 900 apartments, new library, public areas

• Scentre's plans for Newmarket's Two Double Seven

• Kiwi Property's upgrade and expansion of LynnMall, opening The Brickworks dining/entertainment area including the new Reading cinema complex.

Last year, global retailers arrived in New Zealand or expanded their presence here. Top Shop opened a second store in Wellington, David Jones opened its first in Wellington and Tiffany's H&M and Zara opened in Auckland.

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