With specialty sales at $15,660 per square metre, Westfield Sydney and its luxury brand tenants set global performance benchmark

With specialty sales at $15,660 per square metre, Westfield Sydney and its luxury brand tenants set global performance benchmark
With specialty sales at $15,660 per square metre, Westfield Sydney and its luxury brand tenants set global performance benchmark

The Westfield Group has hailed the success of its Westfield Sydney flagship store, which it says has “changed the face of retailing in downtown Sydney".

The shopping centre, which was completed on Pitt Street Mall in April last year counts Gap, Zara, Calvin Klein, Diane von Fürstenberg, Prada, Versace and Chanel among its tenants along with a fine dining food court on level six and the opportunity for high tea at the The Victoria Room Tea Salon on level four.

It achieved annual specialty sales of $15,660 per square metre, the highest in the group’s global portfolio of 104 shopping centres spread across Australia, the US, the UK, New Zealand and Brazil, according to Westfield’s 2013 shareholder review.

This compares with average annual speciality sales across the Australia and New Zealand portfolio of around $9,900 per square metre.

The success of Westfield Sydney was replicated at its other recent flagship store addition, Westfield Stratford City, a $2.7 billion development in east London, which managed $1.4 billion in retail sales in 2012, its first year of full trading.

westfieldapril30flicker

Westfield has attributed the success of both stores to a new retail strategy based around “four key areas” incorporating: "the quality of design and the standard of services; the growing internationalisation of retail brands; the higher standard of food integrated with fashion and entertainment; and the creation of great customer experiences".

This strategy is highlighted colourfully across the pages of the shareholder review with the front page made up of a collage of international luxury brands and the inside pages including a full page photo of R&B star Rhianna singing at a concert at Westfield Stratford City, where she turned on the Christmas lights in November last year.

It also noted by Westfield chairman Frank Lowy, who says that a decade ago, the group “embarked on a major shift towards developing much higher quality shopping centres capable of delivering unique experiences in everything from fashion to food, entertainment and major events”.

“This move anticipated not just the emerging demand by consumers for better designed buildings and improved customer services, but also the demand by retailers, and especially international and luxury brand retailers, for space in high-profile and prestigious locations in some of the world’s leading cities.

“Through our development of iconic malls, we combine these elements to make the mall an essential part of the city and the community’s social and economic fabric.

“Our focus is to invest our capital and expertise in assets that can continue to adapt in these key areas and thereby be the destination of choice for shopping, dining, entertainment, events and socialising” says Lowy.

However, he also noted the subdued performance of Westfield in Australia relative to the other markets it operates in, including a more favourable performance in the UK and US, “with the United States well into a recovery from the period of the global financial crisis”.

The 2013 Westfield shareholder review highlights the group’s $64.4 billion in assets under management in 105 shopping centres in Australia, the US, New Zealand, the UK and Brazil.

The shopping centres comprise a total of 22,800 retail shops, which record around 1.1 billion annual customer visits generating $40 billion in retail sales every year.

Average specialty rent during the year for the Australian/New Zealand portfolio grew by 2.5% with average rent in Australia now at $1,521 per square metre and New Zealand at NZ$1,123 per square metre.

In Australia over 2,400 leasing deals were completed.

Excluding new projects, these represented 15.6% of specialty area, and were completed at rents 2.5% lower than expiring rents.

Westfield has a $12 billion development pipeline and $1.4 billion in projects under construction, including the Westfield World Trade Center in New York.

Projects due to commence this year include Miranda in Sydney, and at Bradford in the United Kingdom.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

Comments

Be the first one to comment on this article
What would you like to say about this project?