Vicinity opens Perth DFO

Vicinity Centres’ first direct factory outlet in WA features 24,000sqm of retail across 113 tenancies and a 1,600-bay car park.

Australia’s second biggest landlord, Vicinity Centres,  has opened its direct factory outlet in joint venture with Perth Airport.

For development manager Sally Ockenden and centre manager Leanne Smith, the opening was the culmination of two years’ hard work and planning, and anticipation, during the relatively fast 18-month construction by Georgiou Group.

Vicinity entered the $150 million JV with Perth Airport in 2016 to develop and jointly own the DFO.

It has approximately 24,000sqm of lettable space and is fully leased, with 113 tenancies and a 1,600-bay car park. More than 750 people are employed across the retail and food and beverage outlets within the DFO.

It is Vicinity’s first DFO in Western Australia.

Ms Ockenden said working with a greenfields site at Perth Airport allowed the group to use the land effectively and to plan for future expansion when surrounding infrastructure, such as the Bayswater to Forrestfield rail link that forms part of the Metronet program, is developed.

The new rail line will spur-off the existing Midland line near Bayswater station and run to Forrestfield, with two new stations built at Airport Central and Redcliffe.

“Coming to a site, having a piece of land and being able to completely build it from scratch, and be able to work with our operational team who know the DFO model well and know exactly what is going to work for the centre in terms of layout and the ideal net lettable area, is a big advantage,” Ms Ockenden said.

“In terms of being able to create such a huge shopping centre and huge retail offer, it has been a relatively fast build.

“We have been able to future proof it as well, so we still have ability to extend our footprint in the food and beverage area for when the train station is built in 2020.”

As Australia’s second largest landlord, Vicinity owns or operates major retail centres such as Queen Victoria Building and The Strand in Sydney, Chadstone in Melbourne, and the DFO chain.

Ms Smith said dealing with tenants ahead of the opening allowed Vicinity to create the preferred retail mix of tenants to suit the layout.

“We have had the advantage of a greenfield site like this, which makes it easier to create precincts,” Ms Smith told Business News.

“Ideally you put retailers into precincts so people know where to go and it is easier for them to shop in areas that interest them.

“Competition within precincts like this actually grows sales, rather than contracts them for other retailers. For example, adding a fashion retailer to an existing fashion precinct benefits everyone.”

Ms Smith said managing a DFO created challenges unlike those faced by traditional centres.

“You don’t have a big anchor and you don’t have shopping trolleys; it is a destinational shop, so if there is a challenge, particularly when you are new to market, it is raising awareness and getting the people to come.

“It’s not like we are flanked by existing infrastructure, but we have been gratified by how much interest there is in the product and in the brand, but we’ve really started from scratch because in WA there isn’t much brand awareness of DFO.”

Ms Ockenden said the key to DFO’s success would be the typical three target markets for Vicinity’s DFO centres across Australia – younger people interested in fashion, bargain hunters, and those shoppers attracted by the brands on offer.

Being out of the CBD and away from major shopping centres, the DFO would rely on people making the effort to get there, and then spending several hours shopping.

“It’s operating seven days, and for many of our visitors, it tends to be a 30- to 40-minute drive and people will come a few times a year to have a few hours out to get some bargains,” Ms Ockenden said.

“From a shopper’s point of view, to have 113 retailers under one roof provides a really broad spectrum of offer.

“We also have a great dining offer, which is a little bit outside the normal DFO model – it is a bit more upmarket – and we have a couple of licensed venues.”