Confidence in the long term outlook for Western Australia, combined with regulatory changes, will see shopping centre owners invest an estimated $5.1 billion dollars transforming metropolitan Perth shopping centres by the end of the decade, according to a new Report by independent commercial property research and information firm, Y Research.
Besides a spike in 2014, there has been limited shopping centre development in Perth since the global financial crisis due to a range of factors including regulatory restrictions, town planning requirements, construction costs and east coast development priorities for institutional owners. In 2017, Perth is set to build on the supply additions in 2016 and ride the crest of a record wave of shopping centre development over the next 5 years.
According to the May 2017 Metropolitan Perth Shopping Centre Development Report, 49 projects, a mix of expansion to existing centres and new neighbourhood centres, are forecast to be completed between 2016 and 2020. By the end of the decade, these developments have the potential to add approximately 25.8% to metropolitan Perth shopping centre supply.
Post the resources boom the West Australian economy, and in particular the property and construction sector, is seeking new drivers of jobs and growth. Shopping centre developments are set to be the main driver of growth in the property and construction sectors in the years ahead. The current development pipeline will see, on average, over a billion dollars invested per annum between 2016 and 2020 and, importantly, around 45,000 jobs will be created in the construction and operation of these centres.
There are two key drivers to the Perth shopping centre development pipeline – continued delivery of neighbourhood shopping centres on Perth’s fringes (Byford, Peel, North west corridor). Ten neighbourhood centres were completed in 2016. A further 22 neighbourhood centres will be added by 2019.
The bulk of development will come from the once in two decade expansion of Perth’s major shopping centres. The 2010 introduction of the Activity Centres Policy has facilitated changing major regional centres from big retail boxes to community focal points encompassing a broader range of uses. The wave of development will create entertainment hubs across Perth’s suburbs. No longer just food courts, centres will establish dining precincts with top line restaurants and taverns. In limited examples, there is space planned for concerts. Refurbished and expanded cinemas are a key feature despite the rise of streaming services. 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 in expanded centres. Significant apartment supply is planned in the broader activity centres offering future residents amenity, public transport links and local services.
To fill these expanded centres, the next wave of retailers are coming to Perth. Building on the recent success of Aldi and H and M, by the end of the decade Perth will likely see brands such as Marks and Spencer, TK Maxx, Uniqlo, GAP, Sephora, Miniso, Decathlon and Under Armour open stores in WA. New centres will also see partnerships between existing retailers and international retailers such as Harris Scarfe who will exclusively offer British retailer Debenham’s fashion apparel.
More than redevelopments, these projects are a reimagination of “a trip to the shops” in metropolitan Perth. Future centres incorporating technology and modern retail design will offer Perth shoppers an experience previously not found in WA. More international retailers, non-traditional shopping centre offerings and new food, dining and entertainment options will create long desired 7 day activity at shopping centres.
Importantly, these developments will create much needed jobs and growth over the next 5 years in their construction and operation. By the end of the decade, shopping centres will have achieved their outlined role as a focal point not only for the community but for the development industry as well.
WANT TO KNOW MORE?
Copies of Y Research’s Metropolitan Perth Shopping Centre Development Report are now available. Copies of the Report are available for $330 inc GST. To purchase the Report, please visit HERE.