After years of planning in the wake of regulatory changes, an estimated $4.5 billion dollars is set to be invested in the long awaited transformation of metropolitan Perth shopping centres by the end of the decade.
According to Y Research’s May 2016 Metropolitan Perth Shopping Centre Development Report, 42 projects, a mix of expansion to existing centres and new neighbourhood centres, are forecast to be completed between 2015 and 2020. By the end of the decade, these developments have the potential to add approximately 24.4% to metropolitan Perth shopping centre supply. Upon completion, these centres will be home to new supermarkets, department stores, discount department stores, international retailers and an estimated 1,784 additional speciality retailers.
As investment in the resources industry moderates, and Perth’s office and residential markets slow down, Western Australia and the property industry must encourage new sources of investment. Shopping centre developments are set to be the main driver of growth in the property and construction sectors in the years ahead. Planned shopping centre developments are forecast to create $750 million worth of investment per annum between 2015 and 2020. Thousands of jobs will be created in the construction and operation of these centres.
Changes to planning policy under the current Government, the introduction of the Activity Centres Policy and extended trading, have facilitated planned investment in major regional centres while the real legacy of the resources boom, a larger population, supports the development of local shopping facilities.
Under the previous planning policy, Western Australia’s major-regional centres fell dramatically behind the rest of the country in terms of comparative size. Every mainland state in Australia, except for WA, has a super-regional centre over 130,000 sq m. As a result of this overdue investment, the largest amount of proposed development is at major-regional centres – Carousel, Galleria, Garden City, Innaloo, Karrinyup, Midland Gate and Whitfords City.
These major shopping centres are evolving to become more than simply places to shop. The expansion of Perth’s major regional centres to super regional centres is based on providing what the internet and neighbourhood centres can’t: great public spaces where people can meet, eat and be entertained, in addition to shopping. These centres will rely on the experience offered to customers to drive traffic into brick and mortar shops.
To fill these expanded centres new international retailers, ranging from Aldi to Zara, are coming to Perth. Zara, Topshop, Williams-Sonoma and H and M have opened Perth stores to significant fanfare. Aldi is set to open the first of 70 planned stores in Perth next month. By the end of the decade the next wave of international retailers will likely see companies such as Uniqlo, GAP, Sephora and Under Armour open stores in WA.
In addition to international retailers, the current wave of development will create dining precincts and introduce restaurants and taverns into WA centres. New service based retailers will become main stays of larger regional centres. Gyms, childcare centres, medical centres and children’s playgrounds will create daily interaction.
While neighbourhood centres, anchored by supermarkets and providing local convenience, provide yearly growth in shopping centre supply, the wave of regional centre expansion set to commence in 2016 will change the definition of “a trip to the shops” in metropolitan Perth. Larger, more diverse centres will create significant employment as well as public spaces for the community to enjoy. Future centres, with a mix of existing retailers, new international retailers and new services, will create long desired 7 day activity at shopping centres, attracting residents to nearby apartment developments and underpinning public transport investment.
Copies of Y Research’s Metropolitan Perth Shopping Centre Development Report are now available. Copies of the full Report are available for $825 inc GST with a “Vitals” summary edition available for $275 inc GST. To purchase a version of the Report, please complete the order form, available to download HERE.
About the Author
Damian Stone is the Chief Problem Solver of Y Research which specialises in providing independent research and analysis on West Australian commercial property.
Y Research produces a series of regular reports on Western Australia’s commercial office, retail, apartment and industrial markets, as well as providing consultancy services to a range of Government and private clients.