Shopping centre owners are expected to invest an estimated $5.1 billion to transform 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.
According to the property firm’s latest research, 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 per cent to metropolitan Perth shopping centre supply.
Once completed, the centres will be home to new supermarkets, department stores, discount department stores, international retailers and an estimated 1,480 additional speciality retailers.
“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,” said chief problem solver of Y Research, Damian Stone.
Stone said 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 five years.
“Post the resources boom, the West Australian economy and in particular the property and construction sector, is seeking new drivers of jobs and growth,” he said.
According to the report, 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,” the research showed.
Stone said 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,” he said.
According to Y Research, 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 mainstays 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.
Stone said 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,” he said.
Stone said 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.
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