Where some commentators have suggested that shopping centres would not survive the advent of online shopping, after more than a decade of competition, the facts belie the theory: quality shopping centres are not only surviving, they are thriving.
Nowhere is this more true than at Kiwi Property, owners of Sylvia Park in Auckland – recently named New Zealand's favourite shopping centre. For the 12-month period ended March 2018, more than 50 million shoppers spent over $1.6 billion across Kiwi Property's seven shopping centres, with sales growing 3.9 per cent on the year prior.
Chief Executive Chris Gudgeon said: "At Kiwi Property, vacancy at our shopping centres is less than 0.5 per cent and our shopping centres are more productive than they've ever been. Our specialty store operators are achieving average sales of $10,600 per square metre, up 7.1 per cent in the past 12 months.
"The success we are experiencing at Kiwi Property is because we focus on delivering the right mix of in-demand retailers and customer experiences – an approach that responds to how New Zealanders are changing the way they work, shop and play.
"Our centres have more food, more entertainment, more personal services, community events and programmes, and pop-up activations that bring constant renewal and excitement, for all ages and all shopper types. They are vibrant spaces that invite the community in, for convenience, fashion, food, entertainment and for connecting socially with friends and family. At Sylvia Park we have constructed in the airspace above our dining district a 10-level office building that is already 90 per cent leased thanks to the amenity and excellent transport links provided in what is now becoming a town centre."
Compared to global benchmarks, the New Zealand shopping centre sector is relatively undersupplied, with the amount of retail floorspace per person being one quarter that of the United States and half that of Australia. Particularly in Auckland, the growth in retail floorspace has not kept pace with demand, which has been fuelled by population growth, creating opportunities for strong centres to expand and take market share.
"In this digital age, it is still quite clear that retailers rely on their bricks-and-mortar stores as they develop their online distribution capability. The physical interaction that comes with an instore experience for a retailer's product and brand is still a critical part of the customer connection. We make that instore visit even more compelling by providing shoppers with a whole range of complementary experiences in a social, fun and entertaining environment, which is why, by every measure, we are stronger than ever," Gudgeon said.