See Gary Horwitz speaking at the Big Guns lunch – video below
2016 will be an interesting year for our industry. Our focus over the past few years has been on the customer, how they interact with us and utilise our centres and, more recently, how technology and innovation have changed their retail experience. This year and beyond, the challenge for retailers and asset managers will be how we use consumer insights to lead us into the future.
For Lendlease’s Retail business, this year will be about playing to our strengths. Our point of difference is our ability to create unique mixed-use spaces. Lendlease is at the forefront of creating the best places where people and communities prosper, and is committed to setting new benchmarks in urban living across the globe. Urban regeneration is a key pillar of Lendlease’s strategy. It’s a philosophy that celebrates a love of cities, urban living and design. We consider the complexities and challenges within these cities, and provide innovative solutions for the benefit of the communities that live in them.
Our urban regeneration projects comprise approximately 70% of Lendlease’s $44.9 billion global development pipeline as at 30 June 2015. Our breadth of capabilities makes us a leading property developer, able to deliver complex, sustainable and vibrant places for people to live, work, visit and play.
Recent urban regeneration projects have shown us retail is critical to a mixed-use development. When retail is not managed well it has a flow-on effect for all tenants. Retail is crucial in creating a sense of place for communities. At our significant urban regeneration projects, such as Barangaroo South and Darling Harbour Live, we have created unique spaces specifically designed to meet the needs of people. These precincts have also created opportunities for us to truly collaborate with our partners, to stay committed to a vision and design a seamless transition for the community, combining public spaces and retail.
Shared vision, shared success
Our visionary founder Dick Dusseldorp was passionate about creating better places for communities to live, work, visit and play. Still today his vision guides our business and decisions we make. At the forefront of our mind is our responsibility to the next generation of customers through leadership, innovation and sustainability.
At Barangaroo South, our vision for the retail offer is to create Sydney’s global village – a remarkable retail precinct that skilfully balances ‘global city’ experiences with the intimacy and human touch of a village. We are also seeking to create the most sustainable retail precinct in the world, where all stakeholders are committed to minimising their environmental impact.
This vision has guided us throughout the various stages of Barangaroo South’s development. From curating our leasing profile and securing some of the country’s finest restaurant talent; to the manner in which we have designed the various precincts and retail tenancies to reflect Sydney’s vibrancy and personality; to how we are continuing to engage with our community and broader Sydney as we start to market Barangaroo South on the retail stage. Lendlease has a considered global mindset, yet we have adopted a very local, fine-grain approach to delivering the retail experiences at Barangaroo South.
Working towards a shared vision for Barangaroo South has enabled us to partner with retailers and restaurateurs who have an entrepreneurial mindset and are prepared to test new concepts and think outside of the box to create unique experiences.
Together we create the best places
For a long time now, our industry has discussed the need to collaborate with partners when creating new shopping centres or redevelopments. But what does this collaboration look like? I think true partnerships are mutually beneficial to all stakeholders including our customers. True partnerships will strengthen and improve performance and outcomes within our centres.
Barangaroo South is a great example of true partnerships at work. Encouraging innovative collaboration between retailers, owners, and Lendlease as developers and asset managers has been an exciting part of our Barangaroo South journey. In our quest to provide retail solutions, we look to respond to local, regional and broader trends while reflecting the importance and intimacy of shopping in people’s daily lives. We share these insights with our retail partners to nurture retail and ensure it thrives.
Our partnership with David Jones is testament to this. Lendlease has enjoyed a longstanding partnership with David Jones across many of our retail assets, yet Barangaroo South presented the first opportunity for David Jones to reimagine their business model in a major way.
Traditionally, large-format department stores operate out of 12,000m2 of retail GLA. At Barangaroo South, David Jones is challenging this notion and will deliver a sophisticated boutique concept, meeting the needs of the discerning Barangaroo customer within a store of approximately 1,400m2. World-class service, world-renowned brands and premium value-add services will all be on offer at David Jones Barangaroo, yet in a format that will surprise not only the customer, but the industry. It is through a trusted partnership and a shared desire to create an extraordinary customer experience, that innovative concepts can be delivered.
As the public spaces we create become larger and increasingly accessible, the pressure to deliver seamless integration and retail mix is increasing. We need to ensure retail works at a ground level. It’s no longer about shopfronts, it’s about streetfronts. How we layer, from paving through to the public bench and into the shopfront, is an essential component of vibrant street life. An integrated design approach to street life brings together transport, public spaces and retail amenities. The right retail mix is needed to support both the night-time and daytime economies and be attractive to tenants and residents. Through expert curation, retail in our projects contributes to the walkability of cities and suburbs, and deeper relationships between retailers and communities, and provides enormous opportunity for business incubation and growth.
Transactions need heart
Our customers are life-long customers. So many firsts are created in shopping centres: the first trip to the movies (with and without our parents!), the first job, the first coffee with a new mother’s group, and the list goes on. These first experiences capture hearts and, in turn, customers’ loyalty for life. Our success in securing this connection with the people that live, work and play in our spaces will be critical to our long-term success. We can measure our success in this area but not always with a dollar attached.
On every level, organisations have the ability to focus their business on having a heart. While we have financial responsibilities to our owners, retailers and customers, we have a responsibility to serve the community well into the next generation through leadership, innovation and sustainability.
Recently our Pop-Up team organised a partnership with the Red Cross to create pop-up donation depots to help collect clothing and accessories for Red Cross Shops. These Pop-Up donation depots are an innovative use of hoarding that allows us to connect and engage with the community. Within a month, our generous customers and retailers had donated approximately 2,500kg of stock! This is an example of Lendlease’s commitment to social sustainability, which we believe includes creating a sense of place and belonging for the community within our shopping centres. There are plans to develop this initiative further over the coming months.
Be our guest!
Recently we saw Amazon – the world’s leading e-commerce business – open its first retail shop. They created an offline experience with all the online benefits. They understood their customers’ need for a guest experience, just the way you would provide a guest experience in your own home. The hospitality industry have mastered the guest experience and know customers seek out these experiences and are happy to pay for them! The opportunity is there for us, as asset managers, to deliver this to our shopping centre customers too. It’s this customer guest experience that will take us into the future. Our ability to create guest experiences from the home to the shopping centre and back home again will be critical in keeping our connection with the customer.
We’ve done extensive research with our customers to understand how we can improve our guest experiences.
Our $240-million redevelopment at Macarthur Square in Sydney will transform the centre into the largest and most extraordinary shopping experience in the region. Delivering everyday guest experiences – additional parking, services, amenities, design of shared space, remarkable retail offerings including dining and entertainment – will be key to our ongoing success and proud history in Sydney’s south west. (see the cover story for more details).
Only time will tell how the next generation of customers use our shopping centres but with a strong vision, true partnerships and creating a sense of belonging and place in our centres, 2016 will be another year of strong growth and performance for Lendlease.