Will competitors respond to Sylvia Park expansion, or simply watch?

  • Opinion
  • December 13, 2017
Will competitors respond to Sylvia Park expansion, or simply watch?

The recent announcement that Farmers Trading Company were going to open a new large store in Sylvia Park shopping centre in Auckland has opened up a range of new questions as to the strength of Sylvia Park and the potential decline of other shopping centres.

Farmers have stores in Pakuranga, Botany, Manukau and Newmarket shopping centres and all are within a maximum five to nine kilometre radius of Sylvia Park. So what does this mean to Sylvia Park and the other centres?

Sylvia Park is now by far the largest and most effective shopping centre in New Zealand.

The Kiwi Property owned shopping centre has outmanoeuvred its competitors with extensions and new retailers over the past few years and they are now adding a new commercial building and further retailers including the new Farmers. Seldom is a centre so complete with almost all major New Zealand retailers represented in the one environment. Add to that, new international retailers such as H&M, a smart food and beverage environment, a cinema complex, together with a railway link and the concept is unbeatable. So is there an Achilles heel? Ironically, the growth and range of retailers is the Achilles heel in itself. Getting to the shopping centre off a very busy arterial route and finding a car park is a nightmare.

Adding more car parking may sound like the answer, but it will never satisfy the demand at peak periods when customers want to get into the centre, do their shopping and get back home.

Simply put there are no answers to customer frustrations and while Sylvia Park is by far the best retail offering in New Zealand, it will continue to frustrate itself through its inability to handle traffic flows in a controlled and stress-free manner.

More to the point however, is the impact on nearby shopping centres. One would have thought that all competitors would have taken the opportunity to beat Sylvia Park at its own game and offer shoppers more of the same but most importantly better parking. They have all failed. In fact, it seems that Pakuranga Plaza, which sits well located at the junction of one of Auckland's busiest intersections, has effectively flown the white flag. Most of its retailers have abandoned the centre and with Farmers Trading announcing an opening of a large new store at Sylvia Park, the retention of Farmers at Pakuranga is most unlikely given the proximity of Pakuranga to Sylvia Park. Apparently, Pakuranga has also abandoned its plans for a major $500 million redevelopment so the retention of Pakuranga Plaza as a major retail hub looks to be under serious threat.

In days of highly competitive behaviour, and traditional retail under threat from the likes of a circling Amazon, it is prudent as a shopping centre owner to continue to improve the offering. Kiwi Property did not sit on its laurels but continued to expand and improve its offering. Other centres have failed to respond and the shift in retail power is remarkably obvious. What will be key for the future however is the availability of parking, and the door is still ajar for competitors to Sylvia Park to make a move!

 Paul Keane is a registered property professional and has vast experience in New Zealand’s commercial property industries. He provides retail and property consultancy including development management to many New Zealand property owners, developers and city councils. This post originally appeared on RCG's blog.

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