Retail landlord sets sights on eastern seaboard
The property firm has just launched the new multimillion dollar wing at Birkenhead Point, which sits on the fringes of the Sydney CBD, and includes an outlet for designer department store Harrolds, which stocks the likes of Saint Laurent, Balenciaga and Alexander McQueen.
There’s also an Ital Collezione (home to Dolce & Gabbana and Versace) as well as a new Michael Kors, Coach, Bally and the first outlet store for Aussie streetwear brand Zanerobe.
The brands will occupy the western end of the newly renovated Level 2 shopping gallery, joining other international names including Armani, Hugo Boss, Polo Ralph Lauren, Calvin Klein and Victoria’s Secret; plus local Australian designer Oroton.
Susan MacDonald, head of Mirvac retail, said the retail landlord is “aspirational about what we think Birkenhead can be” and that the redeveloped centre was a good example of the property firm’s overall strategy of refining its centres, as opposed to simply making its assets larger.
The centre has used the space, previously occupied by a David Jones outlet, to incorporate six new spaces for retailers including the first Peter’s of Kensington store outside of the original location (which MacDonald said will broaden the retailer’s reach to an international audience), with Birkenhead catering to a high influx of tourist shoppers.
“Since we’ve had the centre over the last two and a half years, we’ve done 70 new lease transactions, including the latest yields that we’ve opened, so it’s really about actively remixing, being agile, responding to what the consumers want and bringing those retailers into the centre,” MacDonald told IRW.
Location, location, location
Mirvac operates a portfolio of shopping centres across Australia’s eastern seaboard with total assets under management of over $3.6 billion. It is heavily weighted in Sydney, with about 70 per cent of its centres located in the harbour city. The majority of these are within a 10-15km radius of the Sydney CBD, with Mirvac looking to target both domestic and international markets with its “bespoke portfolio,” which sees the property firm leave centres unbranded – aiming to differentiate each centre by targeting the trade areas in which the centre operates.
Mirvac’s Sydney portfolio occupies prime waterfront locations, which MacDonald said sets Birkenhead up to position itself as a premium outlet for domestic and international shoppers.
“When we look to developing our centres, we don’t talk about doubling in size, it’s about understanding what the market’s about and really reworking the existing space without creating a lot of new space.”
Mirvac’s second largest exposure is in Queensland, with three retail assets, which MacDonald said would be an area of focus, with more redevelopments of its existing centres on the cards.
“We say we’re agnostic about size with retail performance,” said MacDonald. “While we do look towards the larger end, we do a lot of experimenting with the newer smaller offer…learning about different customers and business types.”
Mirvac’s Broadway Shopping Centre will also see its level 1 common area refurbished soon, with the redevelopment of the Model & Moxham building also in consideration for how it could be reworked.
Less is more
Speaking generally on the state of retail in Australia, MacDonald said that there will always be winners and losers, with those retailers who don’t “passionately know their customer” or how to service them likely to be the ones failing.
“Maybe having 250 stores might have been the right way to go because you can spread the cost of your business, but I think a lot of the smarter retailers are saying ‘less is more, let’s get the right number of stores, really fit those out, merchandise and staff them correctly so people feel great about them’.”
MacDonald also said the growth of social media channels and popularity of sharing activities online, showed that people still want to get out and about.
“I’m a great believer that people are very social by nature…it’s just a changing market and I think it’s the most exciting thing about retail.”
Last month, Mirvac’s ferry service – which operates a daily service between Circular Quay, Harbourside Shopping Centre and Birkenhead Point – hit 10,000 shoppers less than 12 months after launching, with Mirvac targeting 16,000 next year.