Shopping Centers Today International

NOV 2015

Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)

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O N T H E G R O U N D : S y D N E y , A U S T R A l i A Developers race to serve international retailer, tourist boom As the Australian dollar plummeted by 25 percent against the greenback and by nearly as much against the Chinese yuan in the year to September 2015, tourists poured into Australia. None of the cities benefited more than Sydney — whose shopping centers and downtown have been humming with big-spending visitors alongside locals. The first seven months of the year saw the number of overseas visitors to Australia surge by 7.2 percent — those from China by nearly 20 percent — according to Tourism Australia. These days the tourists have more shopping options in Sydney because of the recent entry and expansion of global fashion retailers through all parts of the metropolitan area, now home to some 4.6 million people. But finding a spot for these international brands was no easy task in a city where prime shopping center occupancy routinely exceeds 95 percent. As a result, shopping center owners have been carrying out for- midable expansions. "It's been amazing to witness these centers deliver space to suit demand in such a short space of time," said Leighton Hunziker, a divisional director at Savills Australia who represents some of the international retailers moving in. "It seems that all the projects the global financial crisis stalled were reincarnated when large-format internationals came knocking." The affluent north side of Sydney Harbour is a hotbed of new development activity. The rush to grow bigger to accom- modate international brands began when Macquarie Centre, owned by AMP Capital, opened a two-level, 443,000-square-foot expansion in October 2014. The new wing houses For- ever 21, Gap, H&M, Sephora, Uniqlo and Zara, together with a David Jones depart- ment store and several Australian designer brands. Anecdotal information suggests that the shopping center is trading its socks off, though its owners are anything but com- placent, owing to new competition. Scentre Group, which now owns and operates the Westfield brand in Australia, is adding some 30,000 square feet of space onto Westfield Chatswood, a regional mall less than 10 kilometers (about 6 miles) southeast of Macquarie. The trade areas overlap, and the Chatswood expansion, which is due for unveiling in 2016, is to be allocated largely to such international brands as H&M, Top- man, Topshop and Uniqlo. Some 15 kilometers to Chatswood's east is Westfield Warringah Mall, which has a makeover of its own due for opening in April. It, too, will boast some of the familiar international fashion names, courtesy of space surrendered by a flagging department store. Meanwhile, 30 kilometers northwest of downtown Sydney, QIC's Castle Towers is set to get a big extension by 2019, though the details have yet to be firmed up. Other redevelopment is occurring or has occurred in downtown Sydney and at several suburban shopping centers to the west and south. And yet despite all the excitement over the globalization of Sydney's retail market, not all the in- ternational names are experiencing an easy entry. Abercrombie & Fitch's Hol- lister label has come, seen and been vanquished in an unnervingly short time. "You have to respect the market. Retail is detail, and the past is littered with those retailers that haven't done a lot of homework on Australia, just assuming that the dynamics are the same as they are back home," said Hunziker. "Australia is a competitive and high-cost country — the margin for error is slim. — Michael Baker M a c q u a r i e c e n t r e '' It's been amazIng to wItness these centers delIver space to suIt demand In such a short space of tIme. It seems that all the projects the global fInancIal crIsIs stalled were reIncarnated. " N O v e M B e R 2 0 1 5 / S C T 51

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