29/07/2010 - 00:00

Shopping centres poised for expansion

29/07/2010 - 00:00

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PLANNING policy changes due to be released this month will give shopping centre owners in Perth the impetus to invest in centre expansions, an area which has been constrained for over ten years, according to the Shopping Centre Council of Australia.

Shopping centres poised for expansion

PLANNING policy changes due to be released this month will give shopping centre owners in Perth the impetus to invest in centre expansions, an area which has been constrained for over ten years, according to the Shopping Centre Council of Australia.

The state government’s Activity Centres Policy, part of the state planning framework Directions 2031 that is due for release to the public this month, will remove an artificial cap on floorspace at shopping centres.

Shopping Centre Council of Australia chief executive Milton Cockburn said he expected the new policy would allow shopping centre owners expansion opportunities.

Mr Cockburn said he understood there were plans in place for the expansion of shopping centres at Innaloo, Whitford City, and Karrinyup, among others.

Innaloo Shopping Centre owners Westfield Group acquired a supermarket-based retail centre of around 9,500 square metres in 2006, providing the opportunity for expansion of the main centre.

But Mr Cockburn said there had been a dearth of investment in WA retail developments compared to other states over the past decade.

He said that over the ten years to 2008, Westfield spent $3.5 billion in NSW, $1.75 billion in Victoria and $895 million in Queensland on new shopping centres and shopping centre expansions.

Conversely, Westfield spent $55 million on shopping centre developments in WA.

In that same period, Mr Cockburn said AMP Capital investors completed $800 million in shopping centre developments across the eastern states, and recorded more than $1 billion in development applications, but were only able to complete $150 million of developments in WA.

“That gives you an idea of the way in which shopping centre developments have been constrained in WA as a result of the cap.

“Retail demand was much higher in WA than the other states over that period so that sort of drives home what sort of a constraint it’s been.

“If it wasn’t for the resource boom and the strength of the WA economy, those figures would have been sorely noticed, you can imagine the 100,000s of jobs not being created as a result, both construction and permanent jobs that were not being created in Perth as a result of that policy.”

Mr Cockburn also said the floorspace cap had been a huge constraint on major national retailers’ expansion plans, and cited the case of David Jones.

The national department store chain recently announced it had signed a new 20-year lease at Karrinyup Shopping Centre, which includes an agreement with the Karrinyup centre’s owners, AMP Capital, that the owners would seek to obtain development approval to enable the existing David Jones store to increase its space by 50 per cent.

In a statement released earlier this month David Jones chief executive Paul Zahra identified Perth’s northern corridor as a target area with significant growth potential.

Since 2008 David Jones has set up agreements for a new store at Whitford City, an option for a new store at the proposed Westfield Innaloo redevelopment and the agreement for an expanded Karrinyup store.

 

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