This article by Chris Barnett, Head of Retail and Mixed-Use, GPT, forms part of a special CEO Outlook feature published in SCN’s Big Guns 2022 edition.
As I look back on the past 12 months, I can see we’ve started 2022 similar to how we began 2021 – full of optimism and hope that the year ahead doesn’t reflect the year we just experienced. Unfortunately, 2021 wasn’t the year we expected, and it had its fair share of challenges, although it was also fulfilling and rewarding in so many ways.
The first half of 2021 enjoyed a solid rebound in sales and customer visitation as our shopping centres were once again able to trade in a stable environment. This stability was swiftly brought to an end in the second half, with the emergence of COVID-19 variants. Key economic markets of New South Wales and Victoria entered into a prolonged period of lockdown, lasting almost four months. While these restrictions slowed the momentum created in the first half, once lifted, our customers were swift to return, and retail sales recovered back to pre-pandemic levels, allowing our centres and retailers to flourish and enjoy the all-important Christmas trading period.
Despite the rollercoaster of 2021, our talented GPT team continued to keep our assets operational and get on with the job.
Without a doubt, the highlight for me in 2021 was the team and how they remained resilient and agile. From ensuring our centres and customers remained safe, to keeping up with the ever-evolving restrictions, and maintaining and growing their strong partnerships with retailers, most of all, the team provided customers with an enjoyable experience at our centres.
Looking ahead to 2022, I have much optimism and excitement for our centres and the retail sector. High vaccination rates, the threat of extended lockdowns and heavy restrictions easing, international borders reopening and the economic recovery, are all providing strong foundations to return to a more stable retail trading environment.
Throughout 2022, the GPT retail team will have a strong focus on optimising our portfolio and product offer, solving the convenience conundrum, having leading customer experiences and continuing to excel in sustainability and safety.
Optimising our portfolio and product offer
In 2022, we’re pleased to be progressing the mixed-use development plans at our Highpoint and Rouse Hill Town Centre assets. In December last year, we received approval for Highpoint’s mixed-use masterplan, allowing the centre to transform into an Urban Village located 8km from the Melbourne CBD. The approval provides for an additional 148,000m2 of commercial space, 3,000 residential units and further retail opportunities. The project will potentially create more than 9,000 new jobs and be home to about 6,000 residents.
The Rouse Hill mixed-use expansion is targeted to begin in the second half of this year. The development utilises the existing land holdings to deliver 10,500m2 of incremental retail GLA and more than 220 residential units. Further to this, adjoining the centre is the nine hectare ‘Northern Precinct’, which capitalises on the Rouse Hill Metro train station and the recently announced Hills District Hospital that will support a range of health, commercial and residential uses within the residual land. Rouse Hill has been widely acknowledged as one of the country’s most successful mixed-use developments, and we are confident that the expansion will create a true urban destination for the people of North-West Sydney.
While 2021 continued to disrupt, it didn’t slow down the need to evolve our assets, keeping us at the forefront when it comes to what customers are looking for in a rapidly changing retail landscape.
Retailer remixing is a constant focus at our centres. At Highpoint, we introduced the most-requested retailer Kmart and attracted additional flagship stores to the already broad offer. A new full-line Coles will open later in the year, and construction has started on the fitout for nearly 5,000m2 of flexible workspace with Waterman opening its co-working offer.
Solving the convenience conundrum
COVID-19 has changed the expectations of our customers in regards to convenience and the way they shop. Instant gratification driven by the huge spike in crowd-sourced delivery platforms can see customers order food, groceries and have their dry cleaning picked up and all delivered to their home without them moving off the couch. This presents us with an exciting opportunity to reimagine the role of the shopping centre and what we can provide to meet the evolving needs of the customer and the retailer.
The GPT ordering and delivery solution, Retail Runner, has to date focused on fulfilling food catering orders from our centres. This bespoke digital solution enables the retailer to maintain their relationship with the customer and transact directly, but have their order delivered through Retail Runner. With no cost to the retailer or the customer, Retail Runner delivers within 10kms of our centres. We are excited about expanding this service to additional categories. No longer will a customer need to wait days for delivery; they can now order online at 1pm and have it locally fulfilled from the store and delivered the same day. We look forward to partnering with more retailers in 2022 on this evolution.
We continue to focus on working with and encouraging our supermarket and major discount department store tenants to roll out drive-through Click & Collect capability across our assets – making it more convenient for customers to pick up their purchases without having to leave their cars.
A large Direct to Boot hub for Woolworths is due to open at Rouse Hill Town Centre this year, and we will roll out more drive-through Click & Collect infrastructure across the portfolio throughout 2022.
Leading customer experiences
It’s never been so important to provide our customers with modern spaces and facilities that allow them to reconnect and enjoy our assets. To achieve this, we have been completing ambience upgrades, ensuring our centres are presented as leading-edge spaces. At Highpoint, we’ve created nodes and public areas that provide comfortable spaces for customers to break up their journey, spend time with their friends or undertake work. Our enhancements include aesthetic upgrades to common areas, landscaping upgrades, experience and art installations, giving customers even more reasons to visit the centre.
During the past two years, we have been focused on strengthening our capability and systems to better understand and respond to our customers. Following the launch of The Hive, our bespoke customer data platform that houses our 1.3 million members, we turned our focus to further improving our customer feedback capture and response tools. CX Connex is our voice of customer platform, which collects feedback from direct sources such as NPS surveys and digital feedback channels. This work helps inform how we respond and deepen our connections with customers who visit our retail assets, having strong data and customer-led business initiatives, and partnering with retailers to share insights, to help them better understand the local customer.
Sustainability and safety
We see a strong alignment between needing to support retailers in managing operational costs and also driving improved environmental performance at our retail assets. Our process of reducing energy, water consumption and waste generation where possible has a great outcome for the environment while also lowering operational costs for tenants.
We’re proud to have begun operating our first shopping centres on a carbon-neutral basis which will be certified later this year, and our entire managed portfolio will be Climate Active Carbon Neutral Certified in 2024.
We will continue to optimise building efficiencies, grow our solar generation and innovate through battery storage and demand management programs.
An upcoming highlight is turning our Chirnside Park Shopping Centre into a Smart Energy Hub in partnership with Shell Energy. This will involve installing a 650kW solar array – one of the largest battery storage systems in an Australian property and a flexible electricity demand management process that will help stabilise the grid as it transitions to renewables.
Last but certainly not least, looking after our team’s safety is of paramount importance to me personally and to GPT.
One of GPT’s core values that we live and breathe daily is ‘safety first – everyone, always’. This stretches beyond physical safety and extends to wellbeing and the creation of safe spaces for our customers, retailers and teams.
To summarise, GPT’s high-quality retail portfolio, located primarily in trade areas with above-average population growth, is anticipated to benefit from the expected economic growth, low unemployment and high household savings rates once conditions normalise throughout 2022.
I remain confident that the year ahead will return to a more stable trading environment for our centres and retailers, notwithstanding the challenges I’m sure we will face and overcome together.