The sluggish nature of the retail sector does not seem to be deterring high-end retailers from investing in WA.
The retail sector has been struggling but if the number of high-end fashion retail developments popping up around Perth is anything to go by, retailers have confidence in the WA market.
The new Claremont Quarter is the latest luxury shopping destination to bring international brands to local buyers, with property manager Hawaiian investing $450 million in the redevelopment of the suburb’s once provincial shopping centre.
A shiny new $10.5 million David Jones is the largest retailer in the quarter, taking up 5,400 square metres of the 30,000sqm retail space.
The department store is stocking 450 brands in total, 300 of which are ‘exclusive’.
That number is added to by the 130 retailers in the centre, including brands like Sydney’s Sass and Bide (recently bought by Myer for $45 million), UK brand Karen Millen and 46-year Claremont retail veteran, Adam Heath.
International and interstate brands are continuing to invest in these developments despite the blow the retail sector took from the global financial crisis and its residual effects.
Australian Bureau of Statistics data for the retail sector for the Christmas period show that things did not exactly go to plan.
The sector recorded just 0.2 per cent growth from November to December, with the Australian Retailers Association describing the figure as ‘appalling’. In December 2010 department stores recorded a 0.5 per cent drop in retail growth from the previous year and a 1.2 per cent drop from November 2010.
So why are retailers still flocking to Perth? David Jones obviously has confidence in the WA market, having invested a hefty $10.5 million in its Claremont site and recently renewing its lease and extending its retail space at Karrinyup shopping centre.
And record sales from last year can’t hurt.
The group reported record profits and dividends in 2010, its net profits after tax rising 9.1 per cent to $170.9 million and dividends to ordinary shareholders going from 28 cents a share to 30 cents.
As for its investment in Claremont, according to an internal letter circulated by David Jones, the local demographic is a prime market for the group.
“The catchment area is the most wealthy demographic in the David Jones store portfolio – affluent, educated, sophisticated and highly fashion conscious,” the letter said.
With designers like Chloe, Dolce & Gabbana and Yves Saint Laurent bracing its shelves alongside an extensive portfolio of Australian designers, the store is clearly pitching its wares to that market.
The Claremont Quarter is due to open its dining precinct, dubbed The Lane, in April, which will house restaurants, wine bars and the first WA store for Melbourne-based boutique chocolatier, Koko Black.
Koko Black owner Shane Hills said WA attracted him for obvious reasons. “I made the decision that Perth was the next best opportunity in Australia because of the long-term positive outlook of the city,” he said.
The sentiment was echoed by Hawaiian.
“Today Claremont Quarter is almost fully leased, which indicates confidence in the retail industry in Western Australia and the western suburbs of Perth,” Hawaiian director of investment property Evan Briers said.
Mr Briers said in 2007, when Claremont Quarter initially sought expressions of interest from retail tenants, the trading landscape was better than today but, despite the impacts of the GFC, there had been few changes in leasing inquiries, with all but two of the 130 retail spaces leased.
The Claremont Quarter redevelopment is the latest in a string of retail developments catering to the pointy end of the market, including the $400 million one40william development in the city with 6,500sqm of retail space and Wesley Quarter, which houses brands such as Burberry and pitches itself as a “unique blend of boutique outlets and high-end labels”.
The huge City Square project is set for completion at the end of this year and will have 4,300sqm of retail space, which will join the heritage buildings facing the St Georges Terrace side of the property and the new development.
No retailers have signed up to the property as yet, but developer Brookfield is pitching the retail and commercial space as an extension of the city’s maiden top end retail precinct of King Street, which now houses international luxury brands like Prada and Gucci.
