31/10/2012 - 03:57

Garden City leads $550m in retail projects

31/10/2012 - 03:57


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SPACE RACE: AMP plans to spend up to $400m expanding Garden City, increasing the centre’s gross lettable area to 120,000sqm. Photo: Annaliese McDonough

THREE major shopping centre expansion projects are set to proceed in Perth during the next year, following AMP Capital’s move to full ownership of Garden City in Booragoon.

AMP is planning to spend between $350 million and $400 million on Garden City and an estimated $75 million expanding its Ocean Keys shopping centre in Clarkson.

Perron Group is also looking to invest more in retail, with a $100 million expansion of its Cockbum Central shopping centre due to start early next year.

AMP’s commitment to Garden City followed a major asset swap last week with Westfield Group, involving six shopping centres across Australia.

AMP paid $227 million for the final 25 per cent stake in Garden City, valuing the centre at $911 million.

While the asset swap had been perceived as a ‘divorce’ between the two groups, the reality is they will continue to work closely together on some centres.

In particular, Westfield has been appointed as the design and construction manager for the planned expansion of Garden City and two east coast centres.

However, the two groups are still trying to resolve an impasse over the future of Karrinyup shopping centre.

Westfield wants to move to full ownership of the centre, which is part owned by UniSuper but managed by AMP.

To help avoid regulatory issues with the Australian Competition and Consumer Commission, it put the nearby Innaloo shopping centre up for sale early this year, but to date has not attracted a buyer.

Upmarket retailer David Jones will have a significant bearing on the future of the two centres.

A 2010 agreement with AMP Capital proposed a major expansion of David Jones’ Karrinyup store, from its current 9,500 square metres to about 13,500sqm.

There has been no further news on that front, however AMP has announced that the expanded Garden City will include a new ‘full line’ David Jones store, as well as a new Woolworths supermarket and an allowance for an additional discount department store.

AMP said the expansion could increase Garden City’s gross lettable area to 120,000sqm, from 73,000sqm currently.

An expansion of this scale would make Garden City by far the largest shopping centre in Perth, eclipsing Westfield Carousel, which has a total lettable area of 85,000sqm.

AMP noted that Garden City has been the number one centre in WA for specialty sales per square metre for the past five years.

Perron Group chief executive Ross Robertson said the Cockburn Central expansion would take it from about 35,000sqm to 50,000sqm.

Mr Robertson said the stage 3 expansion was designed to facilitate further expansions in order to support the area’s growing population.

The Ocean Keys expansion will increase the centre from about 22,000sqm to 35,500sqm, to support population growth in Perth’s northern suburbs.

The planned developments follow a relatively quiet period in the suburban retail sector.

The largest development currently under way is a $45 million upgrade of the Woolworths-owned Kwinana Hub shopping centre.

The upgrade will nearly double the size of the centre, taking it to 30,800sqm, and accommodating a Big W discount department store.

Woolworths is also about to begin construction of its fifth Masters store in WA, at Joondalup.

Two smaller shopping centres are nearing completion - the Woolworths-anchored Yanchep Central and the Coles-anchored Haynes shopping centre in west Armadale.



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