AMP Capital to fight online retail with mixed-use shops
AMP Capital is pursuing a bold retail strategy that could eventually see homes, office space and student accommodation included alongside new shopping centres as retail landlords fight to deliver an experience that online retail can’t match.
Retail landlords are increasingly moving towards a mixed-use model, which is set to revolutionise trading hours, the retail environment and the way shopping centre owners approach new development in the future, AMP Capital’s head of retail Bryan Hynes says.
“Everything is under consideration at the moment, whether it’s office space, student accommodation and residential,” Hynes says of the group’s plans for its $2.8 billion development pipeline.
Retail projects account for more than half of the AMP’s total development pipeline, with major projects including the final stage of Gold Coast icon Pacific Fair, which is set to complete a $670 million transformation in November, and a mooted billion-dollar redevelopment at Macquarie Park in Sydney, with three towers earmarked for student accommodation and office space.
The mixed-use model is certainly changing the retail environment and it will eventually shift trading hours
The group is also pursuing other major redevelopments at Karinyup and Garden City Booragoon, while forming longer-term plans in line with international trends in which retail landlords are expanding dining and leisure precincts within their shopping centres, and exploring other ways to activate the areas around the centres, to deliver an experience that can’t be replicated by online retailers.
At the same time, a shift in living preferences towards high density living near shops and transport is informing the direction the portfolio could take, Hynes says, with more consideration given to ancillary uses and “liquid” space inside and around shopping centre developments that could be tailored to apartments, hotels, student accommodation and other uses.
“The mixed-use model is certainly changing the retail environment and it will eventually shift trading hours,” he says.
“So you can expect large groups to respond to that.”
The executive spoke to The Australian after last week unveiling the next major instalment at its Pacific Fair shopping centre on the Gold Coast, with a new wing anchored by international high street brands Uniqlo and H&M.
The opening comes in the same month a swag of analysts have voiced concern at the high price shopping centre landlords are paying to secure big-name international tenants, with fresh data emerging that many of them, including Uniqlo, are yet to make a profit locally, and are facing declining returns per store as the rollout continues.
Hynes dismisses the bearish pronouncements, saying international brands have the power to treble the size of the trading catchment at each centre where they trade.
The installation of Uniqlo and H&M at AMP Capital’s Macquarie Park shopping centre boosted the catchment region to 800,000 residents, from an initial expectation of 500,000, he says.
This article originally appeared on www.theaustralian.com.au/property.