The $270 million redevelopment of Fremantle’s Kings Square is indicative of the experiential emphasis retail property owners are embracing across the city.
The $270 million redevelopment of Fremantle’s Kings Square is indicative of the experiential emphasis retail property owners are embracing across the city.
While the owners of Perth’s largest shopping centres are collectively seeking to establish new high street shopping precincts around their redeveloped malls, one local developer has tapped into the character of Fremantle to ensure its project stands out in a rapidly evolving retail market.
Sirona Capital’s Kings Square redevelopment, the retail component of which is known as FOMO, is part of about $2.5 billion in shopping centre expansions or new builds launched in the past three years across Perth.
With such a high level of development activity producing significant competition for tenants (see page 20), shopping centre owners are going to new lengths to establish an all-important point of difference.
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At Fomo, Sirona Capital managing director Matthew McNeilly said that meant building anything but a typical big box shopping centre.
“That would have been the easiest thing to do, but I’m not sure that that would have worked,” Mr McNeilly told Business News.
“I don’t think that’s what the Fremantle community is looking for and I don’t think the broader Perth community, when they visit Fremantle, that that’s what their expectations are.
“They go to a shopping centre when they need to go to a shopping centre, but when they go to Fremantle they are very much thinking of experience first and foremost, and retail probably hangs off that.”
Mr McNeilly said the vision for Fomo was developed through an extensive program of consumer behaviour research, to understand not only the Fremantle market but also the retail environment of broader Perth.
He said that research emphasised the need to do something different, eclectic and in keeping with people’s expectations around what they would find in Fremantle when they visited.
As a result, Fomo will have a strong focus on bespoke artisans and craftspeople and little emphasis on franchises, unless they have a tailored local model.
“We have always been strongly minded to get the Fremantle locals to come along for the ride with us and they have been very influential in what we are ultimately looking to deliver down there,” Mr McNeilly said.
“It is very much an authentic Freo experience; I didn’t want to land a spaceship in the middle of Fremantle, because that would fail.
“Different parts of the world need to be curated as such.
“In Fremantle, it is pretty easy to define who goes there, who lives there, who wants to visit there, those sorts of things.
“We did a huge amount of work on all of that to understand them first and foremost. Because that is retail. If you don’t understand your consumer, you’ve got no chance whatsoever.”
A different approach to tenancies has also been adopted by one of Perth’s largest local shopping centre owners, Hawaiian.
Hawaiian is the landlord of The Mantle, a multi-tenancy food-and-beverage space designed to be a business incubator in the hospitality sector.
One of the biggest success stories from The Mantle is the wildly popular Short Order Burger, which draws hundreds of patrons on the weekend at Fremantle, and expanded to include a Perth CBD store in January last year.
Hawaiian has sought to build on the success of The Mantle with its Sunshine Harvester Works, located in an adjacent warehouse property.
Sunshine Harvester Works, designed by local architecture firm Post, will include permanent and temporary food stalls focused on giving startup hospitality businesses or food truck operators an experience of a fixed tenancy, without the risk of a long-term lease.
Hawaiian chief executive Russell Gibbs said the concept in place at The Mantle and Sunshine Harvester Works was not too dissimilar to co-working spaces in the commercial office market.
“By providing space to people in the early part of their business development or evolution who aren’t prepared to take a longer lease or commit capital, and by giving them the opportunity to try their wares in that space, then maybe over time we can incubate them and move them into a more traditional retail environment,” Mr Gibbs told Business News.
“So far it’s worked really well. I do think the retail environment is going to change.
“There are certain requirements under the retail tenancy act that require five-year leases, but I think tenants are more interested in taking shorter term as long as they can have the security if things work out well.
“And I think landlords, if they are given that flexibility, would also embrace a shorter-term growth story.”
Outside of Fremantle, Hawaiian has embraced a philosophy of connecting people through its retail assets, Mr Gibbs said.
Hawaiian’s portfolio is mainly comprised of what is known in the industry as neighbourhood shopping centres, which are generally anchored by a major supermarket and feature a suite of specialty retailers that provide essential services.
Mr Gibbs said the wave of major redevelopments at Perth’s major shopping malls presented opportunity for owners of smaller centres to really tap into community needs.
“For the small centres of the type that we own, I see the opportunity to become the new village square,” he said.
“Which is why you can see the Hawaiian centres now moving more towards food and beverage tenancies and meeting areas, whether that be a kids playground or just somewhere to sit.
“I really do believe that the expansion of the big centres really plays to the advantage of the smaller neighbourhood centres.
“They become a convenient option, and it’s really important to be out in the local community and constantly surveying them and finding out what’s important to them, and convenience is definitely important to them.
“That may be picking up something that they’ve ordered online or it may be dropping in to pick up something for a meal each night.
“What we are seeing is people’s basket sizes are getting smaller, but they are visiting more frequently.”
Hawaiian general manager of shopping centres Scott Greenwood said the landlord’s focus was also not distracted by the ever-increasing challenge of online shopping.
“We believe that there’s an evolving role for shopping centres to become a natural extension of the local residents’ lifestyle,” he said.
“We’re not just a place to shop, but a place to dine, gather, play and learn. We regularly activate our centres with interactive activities and events that build our shopping centres as community hubs and deliver an experience that you just can’t get by shopping online.”
Lendlease recently installed an interactive play space themed on the African Savanna at Lakeside Joondalup Shopping City. Image: Lendlease
At the big end of town, ASX-listed multinational Lendlease has focused on enhancing the experience of shoppers at Lakeside Joondalup Shopping City through market research.
“We have a deep understanding of our customers, who they are, what they want from a visit to the centre and we work hard to give them what they want,” Lendlease acting head of retail, Marco Ettore, told Business News.
“The experiential initiatives that work best in our shopping centres are tailored to our customers.
“For instance, a big segment of Lakeside Joondalup’s customers are families, so the initiatives that have worked for that Centre include its Where’s Wally and African Safari activations, and school holidays and Christmas sensory sessions for families with children with special needs.”
Mr Ettore said Lendlease also utilised social media to tap into the online shopping phenomenon, providing information of their offerings and connecting directly with consumers on platforms such as Facebook, Instagram and Twitter.
Vicinity Centres, Western Australia’s biggest retail landlord with a portfolio that includes the state’s largest mall in Westfield Carousel, has similarly adopted online initiatives to draw customers to its centres.
Vicinity Centres regional general manager of development, Brad Osborne, said the group was increasingly aware that consumers were demanding personalised interaction with brands to complement shopping experiences.
“Around 95 per cent of total retail sales in Australia were captured by retailers with a physical store presence in the past 12 months, and only 5 per cent was captured by pure-play online retailers,” he said.
“This data is clearly telling us that the future is about connected retail and consumers are demanding a seamless omnichannel experience across physical and digital.
“This demonstrates that the consumers who bought online did not have a preference for an online-only experience, but one that required some sort of physical interaction with the brand/retailer.
“This means that physical space will continue to have a very key role in the future, for omnichannel services such as click and collect but also for the next generation of retail, particularly at destination centres – experiences, services, entertainment, gamification.”
