Even more attention has been paid to Sylvia Park’s city linkages – as well as nearly 4,000 on-site car parks, it has its own purpose-built train station.
“If you look at our language around Sylvia Park now, we refer to it as a town centre,” Gudgeon says. “In actual fact if you look at how Auckland Council looks at Sylvia Park, Sylvia Park’s a Metropolitan Centre. So with that, we’ve looked to expand our offerings in food and entertainment, services, personal and commercial services, and it’s worked. It really has.”
Under Auckland Council’s 30-year Auckland Unitary Plan for managing future growth, Metropolitan Centres are regional centres around which commercial activities will be clustered. Other Metropolitan Centres include Takapuna and Newmarket. The idea is that this clustering will reduce infrastructure costs and encourage alternative transport.
Gudgeon says Kiwi Property is embracing the council’s plans to intensify around key transport nodes. Its ambitions go beyond retail growth, too. Kiwi Property’s plans for Sylvia Park include the development of a nine-level office building offering 11,200 sqm of office space. Completion of the $80 million project is targeted for 2018.
“Obviously we’ve got a lot of airspace which we’re never going to use for retail, and we can offer office accommodation with a real point of difference,” Gudgeon says. “You’ve got your own railway station on the site, bus interchange, great motorway access, plus you’ve got all the amenities of the shopping centre. Whether it’s daycare or gym or community constable or commercial services, it’s all there.”
Another interesting variation on the shopping centre norm is planned at Hamilton’s The Base. Kiwi Property acquired a 50 percent stake of The Base from Tainui Group Holdings Limited, an investing vehicle for the Waikato-Tainui tribe, in April. Kiwi Property’s investment includes management of The Base and 120-year ground leases, but the underlying land will remain in tribal ownership.
The tribe plans to build a Whanau Ora centre for family health on part of the site which it’s retained. It’s also made sure unique cultural elements such as bilingual signage are kept up.
Gudgeon says it’s an exciting project: “We are so happy to be in that joint venture with Tainui. We see ourselves as very compatible partners, they’re very happy to have us on site as managers because, you know, it’s our core business.”
The Base is New Zealand’s largest single-site retail centre, covering more than 85,000 sqm. The site includes just under seven hectares of land which is yet to be developed, giving it plenty of potential for expansion.
While alarming headlines are heralding the death of shopping centres in the US - Green Street Advisors LLC told Bloomberg in June that several hundred malls could shut down over the next decade – Gudgeon is confident New Zealand centres are in no such trouble.
He points out that judging by floorspace per capita of enclosed malls, the US has around five times more mall space than New Zealand does, and Australia has approximately double.
“So on that stat, New Zealand is not over-provided. It’s when you get oversupply that you can confront issues, and I think possibly that’s been the case in the US. They’ve been oversupplied.”
Gudgeon looks forward to seeing Kiwi Property and its shopping centres continue to flourish. Kiwi Property’s retail portfolio is maintaining a 99.1 percent occupancy rate, and a 3.8 percent like-for-like net rentail income growth rate. He says running a shopping centre has many parallels with retail.
“Success is defined by sales, what consumers want, what shoppers want, so it keeps us on our toes just like it does with retailers.”
This story originally appeared in NZ Retail magazine issue 747 December 2016 / January 2017