Retail SPECIAL REPORT Retail FEATURE Retailers seek an edge in battle back from closure EXPANSION: Post-redevelopment, Karrinyup Shopping Centre will become the state’s second largest centre. Photo: Gabriel Oliveira The pandemic has accelerated existing issues and trends facing the retail property sector. potentially bolstered by the and Scentre Group, the operator The commercial property 500 or so people returning to of Westfield, both posting huge research firm’s latest study WA each week. financial losses. % found nearly one in 10 stores “Someone described the WA Vicinity Centres reported a across WA’s largest supermar- lockdown as a product recall net loss of $1.8 billion for the 9.4 ket-based shopping centres was VACANCY RATE for people, which I thought 12 months to June 30, as well vacant. was a very apt way of describ - as $264 million worth of write- ACROSS WA’S LARGEST Mr Stone said that was due ing it,” Mr Cresp told Business downs across its 12 WA assets. SUPERMARKET-BASED to a range of existing factors News. Similarly, Scentre Group CENTRES including: weak economic con- “WA has highlighted [that] reported a half-year loss of $3.6 ditions after the mining boom; a Katie McDonald once people are out of lock- billion, following a $4.1 billion tenant bases from straight series of national retailers going [email protected] down, they are going shopping write-down of its properties retail to hospitality and enter- into administration; and recent 8-PAGE FEATURE and using a centre as a day out. across Australia. tainment, he said. shopping centre expansions “Retail is not going away. Although the group does “Significant investment by adding supply. HE state’s retail sector There will be some shifts and not provide a centre-by-cen- proactive landlords in WA has While a limited number of is showing signs of life acceleration of trends that have tre breakdown, its WA centres helped them obtain a strong retailers had surrendered their T after lockdown, with been happening for a long time, reported one of the lowest rates position within the retail tenancies in recent months spending up and anecdotal [such as] online sales … the push of specialty in-store sales losses sector,” Mr Ibrahimi told Busi- – largely tourism-based retail- reports that foot traffic at to mixed use. over the past six months. ness News. ers such as travel agents shopping centres is nearing pre- “But it’s still a core funda- Colliers International head “This strong rebound demon- – Mr Stone said the pandemic’s COVID-19 levels. mental sector of the property of WA leasing Ahmad Ibrahimi strates the accomplishments of longer-term influence was yet Retail expenditure growth market and there’s a huge said while economic uncer- the retail sector in cementing to materialise. in Western Australia of 4.9 amount of institutional funds tainty and volatility remained, its role in the WA economy.” “For a majority of retailers, per cent for the 12 months to in retail.” the state had been a leader in a combination of rental relief June 2020 was second only to Some of those funds are managing COVID-19. Vacancies from shopping centre owners, Queensland (see graph). starting to feel the flow-on- Being able to reopen earlier COVID-19 has, so far, had min- a national code of conduct Urbis director, property eco- effects of enforced shutdown than most states had helped the imal impact on WA’s shopping restricting evictions, and gov- nomics and market research measures, however, with the sector reset faster, backed by centre vacancies, according to ernment assistance (JobKeeper) David Cresp said the state had country’s major shopping centre upgrades over the past Y Research director Damian has seen them return to trad- resumed a sense of normality, centre owners, Vicinity Centres five years that had diversified Stone. ing,” he said. 22 | September 7, 2020 September 7, 2020 | 23 PB | September 7, 2020 September 7, 2020 | PB FEATURE “It looks normal from the was another emerging trend Retail outside, but [after] a closer look Mr Stone said shopping centre Kardinya Shopping Centre you’ll see a lot of these retailers owners would have to navigate Image: Hames Sharley are struggling. in the coming months. “The interesting discussion is In May, Target announced FEATURE the number of sales and ‘back the closure of 75 outlets and in five minutes’ signs, because the conversion of 92 into Kmart they’ve cut staff.” stores. Mr Stone said he had person- This followed the closure ally inspected 78 of the state’s of hundreds of other stores 10 – Annual Growth in Retail Turnover (Current prices) largest supermarket-based associated with the collapse centres across the broader of national chains including 8 – Perth metropolitan region, and Australian Geographic, jewel- recorded a 9.4 per cent collective ler Michael Hill, and accessory vacancy rate as at June 2020. store Colette. 6 – The Y Research report found Mosaic Brands – the opera- the vacancy rate for WA’s major tor of clothing chains Noni B, % 4 – regional centres, including Rivers, Millers and Katie – is Lakeside Joondalup, Westfield retail’s latest casualty, announc- Booragoon and Galleria, was 7.4 ing the potential closure of 2 – per cent, which was more than 300-500 stores over the coming three times higher than their 12-24 months. 0 – historical average of 1 to 2 per Mr Stone said more con - cent. solidation could follow, with Aust NSW Qld Vic WA Claremont Quarter recorded COVID-19 prompting national -2 – 2014 2015 2016 2017 2018 2019 2020 the lowest vacancy rate of any retailers to assess their most Source: Urbis, ABS 8501.0 Retail Turnover centre at 1.7 per cent. profitable stores and locations Retailers seek an edge in Mr Stone said there was a with the most foot traffic. wide disparity across centres, “If national chains aren’t likely reflecting the economic expanding and franchises aren’t conditions across Perth’s sub- expanding, who‘s going to fill battle back from closure urbs; 21 suburban centres had those vacancies?” he asked. vacancy rates of more than 15 EXPANSION: Post-redevelopment, Karrinyup Shopping Centre will become the state’s second largest centre. Photo: Gabriel Oliveira per cent and five centres were Future more than 25 per cent empty. Re-imagined entertainment That number could increase precincts have been the jewel in The pandemic has accelerated existing issues and further, he said, with the mora- the crown for shopping centre torium on evictions set to finish expansions such as Westfield trends facing the retail property sector. in October. Carousel and Westfield Whitford Source: Y Research potentially bolstered by the and Scentre Group, the operator The commercial property “At the end of the day, that million redevelopment of or meet friends for a meal 500 or so people returning to of Westfield, both posting huge research firm’s latest study [the experience] is the dif - Westfield Innaloo (to be after work. For that reason, WA each week. financial losses. % found nearly one in 10 stores This strong rebound ference between going to a renamed Westfield Stirling) we are actively curating “Someone described the WA Vicinity Centres reported a across WA’s largest supermar- shopping centre or buying last year, however, those plans retail, hospitality, wellness lockdown as a product recall net loss of $1.8 billion for the 9.4 ket-based shopping centres was demonstrates the accomplishments something online. were put on hold after Scentre and fitness operators for our VACANCY RATE for people, which I thought 12 months to June 30, as well ACROSS WA’S LARGEST vacant. “Some of those centres, Group announced it had pur - developments, before we start was a very apt way of describ - as $264 million worth of write- Mr Stone said that was due of the retail sector in cementing its there’s a recognition it’s gotten chased a 50 per cent stake in selling apartments or finalis- ing it,” Mr Cresp told Business downs across its 12 WA assets. SUPERMARKET-BASED to a range of existing factors as large as the catchment area … Booragoon shopping centre, ing designs. News. Similarly, Scentre Group CENTRES including: weak economic con- role in the WA economy - Ahmad Ibrahimi now it’s a matter of making the joining AMP Capital as joint “We then create customised “WA has highlighted [that] reported a half-year loss of $3.6 ditions after the mining boom; a land work harder.” owner. spaces for these operators that Katie McDonald once people are out of lock- billion, following a $4.1 billion tenant bases from straight series of national retailers going “Based on discussions with City in recent years, but health Medical was part of that Meanwhile, several other work, rather than trying to ret- [email protected] down, they are going shopping write-down of its properties retail to hospitality and enter- into administration; and recent industry stakeholders, the and wellness is quickly becom- mix, Mr Cresp said, as well as suburban centres are in line for rospectively jam tenants into 8-PAGE FEATURE and using a centre as a day out. across Australia. tainment, he said. shopping centre expansions expectation is that, across the ing the next focus. accommodation, whether that facelifts. pre-designed spaces.” “Retail is not going away. Although the group does “Significant investment by adding supply. balance of 2020, we will see According to an Urbis study, was short-stay, apartments or Property investment and Meanwhile, Con Berbatis HE state’s retail sector There will be some shifts and not provide a centre-by-cen- proactive landlords in WA has While a limited number of a limited number of retailers patrons who visited a medical retirement living.