Retail property players say international fashion brands are only the beginning of the global onslaught.
Retail property players say international fashion brands are only the beginning of the global onslaught.
It has been hailed as a sign that Perth’s retail market is finally catching up with the rest of the world.
Famed UK fashion retailer Topshop Topman is set to open next month in Perth’s CBD, while its arch-rival, Spanish clothing giant Zara, has already made a splash at Garden City Booragoon.
Zara will also open a second outlet in the CBD early in the new year, while last week Business News exclusively reported the long-awaited entrance of H&M is also not far away, with the chain set to sign a lease at the GPO Building in Forrest Place.
Outside of the fashion sector, US-based high-end homewares giant Williams-Sonoma is about to change the dynamic of the Hay Street mall, taking up the former Borders premises across from David Jones.
Lease Equity managing director Jim Tsagalis said the international giants were already placing upward pressure on rents, even before they opened, which meant domestic retailers would need to move quickly to have a chance to compete.
“Domestic retailers will awaken in about 12 months and it will be too late because the opportunity’s almost passed for them to take advantage of what will be seen as a very favourable rental environment versus what it will be in a year,” Mr Tsagalis said.
“That will also mean Topshop, Zara and others would have opened, so they’ll probably pay for the certainty.
“It’s a bit like the stock market, the day before the dividend comes through, you pay the premium which is built in.”
Mr Tsagalis said he expected another wave of international brands to further change the market over the next 18 months.
“I don’t think there is anything absolutely imminent, but there’s a lot of conversation,” he said.
“We’re having a lot of conversations and they are advanced, but it’s not going to happen this year or early next year.”
Burgess Rawson director Cameron Hopkins shared Mr Tsagalis’s optimism that Perth was set to attract even more interest from international brands.
“There are a lot of retailers looking to get into Perth, more so than we’ve ever had,” Mr Hopkins told Business News.
“There have been the big international names that get a lot of publicity, but there are also retailers from the east that want to get into Perth, and they’re planning their rollouts now.
“They’re optimistic about the long-term fundamentals of retail in Perth.”
While the big fashion players have attracted most of the headlines, it is a supermarket giant from Germany that is set to bring the biggest change to WA’s retail property market.
Discount offering Aldi has big plans for Perth, with its expansion ambitions totalling 70 stores and a $450 million investment.
While the first Aldi store is about 18 months away, five are already in the planning pipeline, with approvals issued at Kwinana, Innaloo, Mundaring, Cannington and Southern River.
Mr Hopkins said Aldi would drive significant change in the suburban shopping centre market.
“Aldi is a great drawcard, we know that they bring people from well beyond the normal trading area that you wouldn’t get from an IGA store,” he said.
“They will offer a point of difference, which will improve any shopping centre that you put them in, if you can get them in.
“They love their standalone stores, but they’ll also go into shopping centres and everyone will be clamouring for Aldi stores.
“Retailers also want to be near an Aldi store, including the existing supermarkets.”
Y Research chief problem solver Damian Stone said Aldi’s upcoming entrance to the Perth retail sector had already led to significant change among existing retailers.
Department store giant Myer unveiled a new concept store at Joondalup earlier this month, its first new Perth property in 20 years, showing off its ‘store-in-store’ initiative.
Wesfarmers-owned supermarket chain Coles is also pushing the envelope at Joondalup, with its new outlet encompassing around 5,000 square metres and including a café, a dedicated butcher and an expanded bakery.
“They are focusing on personal service for personal shopping, and it really is the experience,” Mr Stone said.
“You’re really seeing a focus on service and one-stop shopping.”
The other big international player with grandiose Perth plans is convenience chain 7-Eleven.
Mr Tsagalis recently secured a deal for 7-Eleven to take up space in Perth’s McNess Royal Arcade, while plans are also in motion for a Fremantle store to open in coming months.
In total, 7-Eleven plans to open up to 75 stores over the next five years, in an effort to take a major slice of the estimated $270 million convenience store market in WA.
Mr Hopkins said 7-Eleven, with its Krispy Kreme donuts and iconic Slurpee range, would give consumers even more choice when it comes to staple goods.
“If you go to 7-Eleven, you’re getting something that’s a little bit different,” Mr Hopkins said.
“The Slurpee market alone in the eastern states is huge; if you’ve got a child under the age of 16 you just about can’t drive past one of those places without them insisting you go.”
