AMP used to follow. Today it leads. After Pacific Fair and Macquarie, they’ve unveiled their latest plans for two centres in Perth: Garden City and Karrinyup. These aren’t just extensions or even redevelopments; they are leading edge, world-class retail, leisure and entertainment facilities that will change the very nature and characteristics of not just the suburbs in which they sit, but the city of Perth itself. They are phenomenal developments that will become required visitations by shopping centre study tours from all parts of the globe.
To place Garden City Perth and Karrinyup in their true context, one needs to examine them as part of Perth’s total retail scene, as distinct from viewing them in isolation as two separate entities.
The city of Perth is split in two by the Swan River which runs (broadly speaking) east to west; the CBD and city retail precinct is on its northern side. Perth’s CBD or ‘downtown’ retail isn’t very impressive. It’s got the department stores on Hay Street Mall, there is a scattering of the upmarket luxury brands and a very popular narrow walkway/open arcade linking Hay Street with St. Georges Terrace known as London Court; it’s full of souvenirs and is a must-visit destination for tourists.
Of course there’s a lot more, and the retail is fairly comprehensive, but it’s not ‘major capital city’ stuff – it’s distinctly provincial and doesn’t have an international feel by any means. Walk the Hay Street Mall, St. Georges Terrace and the other CBD retail strips and you’ll find some very busy pockets but it doesn’t ‘throng with shoppers’. It doesn’t hum with populous activity, nor is it ‘bursting at the seams’.
Move into the suburbs, however, and the regional shopping centres are chafing at the bit. AMP Capital Shopping Centres’ Garden City and Karrinyup lead the pack, Garden City dominates the regions south of the Swan River and Karrinyup is the most powerful centre serving the inner and middle suburbs to the north.
For over a decade, Garden City has been one of Australia’s top centres. For 10 years straight it has hovered around in the top 5 on the Big Guns rankings in terms of both MAT/m2 and Specialty MAT/m2.
In this year’s Big Gun tables, Garden City was 4th on the MAT/m2 ladder with a massive $10,296, behind only Westfield Bondi Junction, Westfield Sydney and Broadway Shopping Centre.
On the Specialty MAT/m2 ladder its performance is nothing short of ‘staggering’; take the last decade beginning with 2006. Garden City, on the Specialty MAT/m2 rankings, has recorded the following positions: 4th, 2nd, 2nd, 2nd, 2nd, 2nd, 3rd, 4th, 4th, 3rd. For the last nine of those years, Westfield Sydney, the epicentre of the Australian retail scene, has held first place continually.
In terms of ‘regional shopping centres’ therefore, when measured over a decade, Garden City has been Australia’s best performing centre for specialty retail. In 2016, its Specialty MAT/m2 was a staggering $15,537, eclipsed only by Westfield Sydney and Chadstone.
Visit the centre and you’ll feel the pulse of the place; it’s a centre that is ‘owned’ by its customers and its positioning as the premier retail destination in the state of Western Australia draws those customers from afar! With the exception of a few international luxury brands, there’s nothing ‘downtown’ (in the Perth CBD) that isn’t here. Garden City has a massive Apple store – the largest in the Southern Hemisphere and one of only two in the state – and that goes for Zara as well. It’s got the whole complement of the Australian fashion scene and both Myer and David Jones are present.
Garden City, owned by AMP Capital Diversified Property Fund, is unrivalled in the state of WA. It isn’t just positioned as the state’s number one retail destination, it is the number one retail destination and the figures prove it.
But for all this, the centre is of a past era! Last redeveloped in 2002, some 15 years ago, Garden City is showing signs of its age. Still, it’s a centre that’s meticulously maintained, pristine, shiny and extremely well presented. Its retail is vibrant, all encompassing and up to date, but it all sits in an anachronistic setting. Garden City is alive; it’s not tired but it is dated.
In the last eight years, retail in Australia has undergone its most radical change since the dawn of the shopping centre back in the 1950s. Apple opened its first store in this country in 2008; Zara came in 2011 followed by H&M and Uniqlo in 2014. But it’s not just computers, mobile phones and fast fashion that have changed the state of our retail; we’re spending on different things with food and beverage taking a leading role.
As we’ve often said before, the GFC and other financial considerations around 2008 had a somewhat serendipitous effect on the development of some shopping centres. We saw a number of redevelopments put ‘on hold’ around that time, and had they gone ahead as previously planned they would have missed out on the new directions our centres have taken. Garden City had other influences too, such as planning regulations that restricted its expansion. All that has now changed.
It is now poised to undergo a massive $750-million redevelopment that will see it emerge as one of our most powerful centres with a design and tenancy mix placing it in a leading-edge position in the ranks of Australian super-prime regionals.
Big Guns 2016 showed Garden City with an MAT of $720 million from a GLA of 72,221m2. Those two statistics alone tell much of the story; it’s number 51 on the GLA list but ranks 16 in terms of MAT! There are, of course, myriad reasons for its success, one of which is the fact that Garden City sits in the centre of some of Perth’s most affluent suburbs.
Household income in the trade area is 22.4% higher than the Australian average, and the growth rate is also among the highest with the Total Trade Area expected to grow from 488,000 to 550,000 by 2026. This will increase the total retail spend by $4.4 billion.
The redevelopment takes Garden City from its present 72,221m2 to over 115,000m2, almost doubling its size. In terms of shop numbers, it increases its present 190 to over 380.
Both department stores will be represented; there will be two new full-line supermarkets, a brand new cinema complex, along with a fresh food precinct, which takes inspiration from, and indeed goes to the next level to that achieved at, Macquarie Centre and Pacific Fair.
But it’s the style of the new Garden City that is most impressive. They’ve worked closely with the City of Melville and the West Australian Planning Commission and produced a centre that is leading edge, not just in Australian terms, but also by any of the highest international standards.
A main street has been developed that is an integral part of the centre itself. It’s a street providing a casual dining and leisure precinct richly landscaped with exotic foliage, full-sized palm trees and extensive water features, exploited by a mass of alfresco dining spaces flanked by restaurants, cafes, bars, leisure and entertainment outlets which all set the mood for what’s ‘inside’. The street is flanked by the City of Melville’s existing civic centre, and a new library and community facility.
AMP Capital’s Pacific Fair boasts the most comprehensive range of international fast fashion and luxury retailers under one roof in Australia, but that may well be challenged by what they achieve at Garden City. As we go to press, leasing is about to commence and the mood at AMP Capital is very bullish; of course preliminary discussions have already taken place with the major chains, the international brands and the leading specialty retailers. As one might expect, interest is high as the centre is without question the premier retail destination in the state. Presently the centre consists (in overview terms) of two major malls running north/south, linked by a major mall at the centre (fashion) and two secondary malls at the north and south ends running east/west. One of the major malls links the prime entrance at the bus transit station at the southern end, with Kmart at the northern end. The second links Myer (northern end) to David Jones (southern end). The scale and complexity of the redevelopment can be seen in the artist’s impressions.
The centre expands to the west: both supermarkets are relocated, the existing David Jones is demolished and relocated to provide a northern anchor to a new mall linking it to the brand new Coles and Woolworths supermarkets at the southern extremity. What’s important to understand here is that approximately half of the existing centre is being demolished so the ‘new’ component is far in excess of the difference in GLA between the old and the new.
Karrinyup is to the north and is the major centre serving the ‘middle suburbs’ on Perth’s northern side. It’s been the dominant player here since it opened in September 1973.
At that time, with both Myer and David Jones, a Woolworths supermarket, a food hall and some 70 specialties, it was the largest centre in WA. Today, at 60,000m2 it’s the state’s third largest and its trading power is as good as it gets!
Karrinyup has an MAT/m2 of $8,000 with a Specialty MAT/m2 of $12,260, placing it in the top 10 of the Australian Big Guns. In terms of fashion in WA, Karrinyup has always held the top spot; its trade area is affluent and stylish, and fashion retailers have always favoured it. Average Household Income in the trade area is a massive $115,086 – some 30.5% higher than the Australian average.
Karrinyup, owned by UniSuper, is located some 12 kilometres from the Perth CBD and around 3 kilometres from the affluent and prestigious coastal suburbs. Its Total Trade Area of 525,800 is expected to rise to 591,300 by 2026, while retail spending in the Total Trade Area is presently $7.46 billion, expected to rise to $12.12 billion in the same period – an annual growth rate of 4.1%.
But again, Karrinyup is dated. Planning constraints, the GFC and other factors prevented its expansion and redevelopment until recently. AMP Capital research shows there is a strong desire amongst the local community for a redevelopment; it’s an affluent community, well travelled internationally and fully aware of ‘state of the art’ shopping. There is a need for a wider range of fashion and accessories, and a demand for the international fast fashion retailers as well as an improved fresh food offering.
From 59,715m2, Karrinyup will almost double in size, expanding to 113,000m2. The $700-million redevelopment produces a world-class centre with a ‘uniquely Perth’ flavour. It’s a stunning design, fitting, not just for the Perth shoppers but for the international labels it will doubtlessly attract.
There is space of course for the large-format fashion retailers, additional supermarkets, a host of mini-majors together with an entertainment and lifestyle precinct, which will not simply change the nature of the centre, but also the suburb as a whole in terms of what the region has to offer.
There’s a ‘main street’ presentation at the external face of the centre consisting of a large Piazza, a Corso, water features and rich landscaping providing the setting for an entertainment and leisure offering featuring the recently announced HOYTS cinema complex, and some of Perth’s best food and beverage operations. A huge alfresco component is an integral part of this precinct, exploiting one of the best climates in the world for this type of leisure activity.
One could go on and write reams about the centre – its architecture, interior design, its mix, the sheer scale of the project, the creation of the main street and so on and so on. But that’s detail and, important as it is, what distinguishes the Karrinyup redevelopment and that at Garden City, what sets these two centres apart from the rest of the field, is the whole approach to projects that AMP Capital has taken. The approach here is different.
SCN talked at length to the development teams in Perth, to the leasing teams, to the Head of Development, Mark Kirkland, to MD Bryan Hynes and to a host of others in Marketing, Management and so on.
What’s obvious when you talk to these people is how they’re driven by the findings of the internal research they conduct and how these findings, more than anything else, influence the very nature of the development.
We got an insight into this research exercise and found it absorbing to say the least.
There’s a focus on the ‘place’ – the whole ‘place’, as distinct from a collection of precincts. That comes later. The question ‘what is it that people want from this place?’ is asked, and the answers sought are not about this shop versus that, or this floor tile as opposed to that one, but rather about what people want from the whole; what they aspire to in terms of major public facilities and what they would like to see, use and enjoy, in regards to the largest single entity within their community.
They used online consulting boards, posts, pictures, blogs and chats. They recruited people to advise customers on the scale of the projects. It was an interactive program in which people were encouraged to voice their opinions, and more than 7,000 people posted comments on what they would like to see. It’s an ongoing exercise that reaches every aspect of the development, and the information gained drives the project. It is ‘market driven’ in its quintessential form.
What emerged from the research was that the Perth shopper in both regions was highly sophisticated when it came to shopping. They were aware of the modern shopping centre trends. While Perth might be the most isolated city in the world, the people in general were anything but. They looked to Asia rather than to the east coast of Australia and, in fact, they were more familiar with Asia than they were with, for example, Sydney or Melbourne. To fly to Sydney takes around four and a half hours – it’s only 45 minutes more to Singapore. To Jakarta from Perth is four and a half hours; to Bali it’s only three hours and forty minutes. The reality is that Perth is a lot closer to most of the rest of the world than is Sydney or Melbourne; to Asia, they are really close. Perth people think the east coast of Australia is isolated!
The research exercise highlighted five key elements for each project, which led to the development of the architectural brief. At Garden City they included provision of the ultimate food and dining offer. Retail-wise, there was a perceived need to elevate Perth’s status ahead of the rest and across budget ranges in respect of both local, Australian and international brands. There was a demand for iconic architecture and design: a centre that would become a source of pride to the extent of world recognition for Perth, and a centre that would have the capacity to celebrate unique local culture and to host community events. And finally there was identified a need to ‘bring back the garden to Garden City’.
At Karrinyup, the five key elements began with the need for a modern, coastal design to reflect the centre’s unique location as a coastal gateway between the Perth beaches and the city. The centre would need to connect to its market through food – casual alfresco dining integrated with entertainment. The demand for a greater component of fresh food was recognised and all this linked into an activated centre – a lifestyle entertainment hub. Retail demand was for a greater mix of Tier 2 fashion merchandise including Australian and international brands along with unique local, eclectic boutiques. For mood and settings, the key words were ‘relaxed’ and ‘tranquil’ with an extensive use of water.
These key elements, the interaction with the community, the feedback from the locals, the close working relationship between the developers and the councils have produced two stunning designs for Garden City and Karrinyup. What will emerge will change the whole tone of Perth retail. They are developments totalling some $1.5 billion, providing some 5,000 new jobs during construction and a further 5,000 new permanent retail jobs on completion.
The designs, as our pictures show, are world class and will doubtlessly draw all the major retail brands. Both centres at the moment enjoy a significant tourist patronage from the 10.4% of the total tourist spend in Australia that WA achieves. The state attracts some 24 million visitors a year; close to 14 million of those come to Perth with Garden City and Karrinyup high on the visitor agenda.
AMP Capital Shopping Centres is confident in Perth’s continued growth and sees the city with a population in excess of three million by 2040. An interesting fact that came to light when we were writing this story was that Qantas and Emirates had announced non-stop flights from Perth to London and Paris. At first, there didn’t seem any relevance to Garden City or Karrinyup – in terms of pure spin off, there probably isn’t much. But the relevance lies in the future of Perth. These developments are three years away and, by 2020, it’s likely that Perth will have a markedly different positioning than it does today.
The mining boom might be over but Perth is about to move forward. Within half a decade from now, it will be a universally accepted capital city with connections to the rest of the world and an attraction to that world – a leading international city on the Indian Ocean, unspoilt, unpolluted, pristine, healthy with a food and wine industry second to none, a sophisticated population and, of course, leading edge retail, entertainment and leisure facilities in the form of Garden City and Karrinyup.
Bring them on!