Suburban malls told to adapt or die
Suburban shopping malls aren’t dead but it’s not hard to kill them off, retail experts say.
Fears of ghost malls has been raised again with news that McDonald’s and OPSM are joining the string of tenants to leave Wellington’s Johnsonville Mall.
Other malls around the Wellington region are also experiencing fluctuating fortunes, ranging from being a little tired to severe decline, in the case of Wainuiomata mall.
But Kapiti’s Coastlands is booming, thanks to a rising population and motorway changes, while Wellington CBD itself is getting a new lease of life from overseas names.
Elsewhere, Wellington’s biggest mall, Queensgate in Lower Hutt, has been going through substantial refurbishment as it recovers from last November’s quake, sending some shoppers to Porirua’s North City.
Paul Keane, a former chairman of property and retail consultancy RCG, said population changes and ease of transportation changed suburbs, but essentially it was up to mall owners to keep their centres vibrant destinations.
‘‘Consumers will alter their trading patterns. So they may not shop in Johnsonville because ‘there’s congestion and I’m getting older and I can’t park the car’. And the product there is no longer fashionable for young consumers. So that has to be part of the change’’.
Sylvia Park in Auckland was leading the way, wooing new brands like Zara and H&M, and spending up large on expansions and office space.
‘‘The shopping centre is a constantly changing and upmarket beast. It doesn’t stay the same.’’
Reinvestment was key, Keane said. A number of shopping malls had sold in recent years to investors attracted by their good returns, but those returns would only stay high if tenants were prepared to pay the rent.
Another retail consultant, Chris Wilkinson of First Retail Group, said Johnsonville was a good example of a mall that needed to keep up with the times.
‘‘When they talk about these malls closing in the States, this is exactly what we’re talking about here. These malls with legacy formats, with stores that haven’t been upgraded and environments that no longer attract consumers.’’
However, there was hope for the area. Johnsonville was tagged for future growth and the mall’s owners Stride had been promising for some years to expand the mall, most recently committing to a $180 million revamp.
‘‘Johnsonville is probably one of the strongest opportunities in New Zealand in terms of rejuvenating a town centre because its consumer demographic is strong,’’ he said.
‘‘It’s got a relatively captive market there and there’s always been a fairly high degree of consumer support for the township.’’
Generally, Wellington was unique that it had no real regional mall and the CBD was still a major drawcard, Keane said. Its topography did not really allow most of its malls to get much bigger.
‘‘Hence the opportunity at Johnsonville.’’
Johnsonville had once had one of the highest sales levels per square metre in the country. But past and present owners had been guilty of not buying up enough surrounding land to resolve its critical lack of parking.
‘‘All the developer needs to do to retain the asset is blooming well get in there and get some redevelopment done.’’
By contrast, Kapiti Coast’s retailers were doing well, aided by favourable motorway changes and more families moving in.
‘‘There’s a lot of sections being opened up and sold quite quickly there, so it’s quite positive for Kapiti,’’ Wilkinson said.
And Queensgate was expected to enjoy a much better Christmas, after renovations were completed and a big mystery retailer – rumoured to be H&M – opened there soon.