CBDs must adapt as big retailers ditch high streets for malls

Tuesday, 11 September 2018

Saleel Kelkar, centre manager at The Mall in Upper Hutt, which is now fully tenanted.

Empty shops in Upper Hutt's CBD sit in stark contrast to the full house at the city's shopping centre.

The Mall is fully tenanted for the first time since coming under the ownership of Ganson Group in 2014. All but one of the 55 retail spaces are occupied with the lease on the final space having recently been inked.

All 55 retail spaces at Upper Hutt's The Mall have been leased.

Andy Bell, Ganson Group property and development manager, put the full house down to investment and improvements which allowed them to attract 'better quality tennants'.

The company had spent more than $12 million upgrading The Mall - the latest development was a planned space for five new food retailers.

In 2017 the Wainuiomata Shopping Centre was bought by Woolworths NZ which runs a Countdown supermarket there.

First Retail Group managing director Chris Wilkinson said traditional shopping streets, particularly in smaller towns and cities were still finding their feet in the modern retail environment.

Malls provided spaces attractive to large retailers. In the case of Upper Hutt the likes of Farmers and The Warehouse acted as drawcards to the mall – inspiring confidence from other businesses by attracting foot traffic.

Ganson Group has invested more than $12 million improving the Upper Hutt shopping centre since taking over in 2014.

In Johnsonville, centre owners Stride received resource consent in 2017 to redevelop the site but progress has been slow.

* Focus on the shopping experience, and profits will come: AMP manager

* Work to begin on replacing Queensgate's earthquake damaged movie theatre

While The Mall is full, many shops on Upper Hutt's Main St are empty.

* Christchurch's South City Shopping Centre sold in biggest property deal of the year**

'[Malls] provide a more contemporary space that is suitable for larger retailers and chains. In older areas like Upper Hutt and Lower Hutt, high street buildings are no longer suited for larger chains.'

Size, layout and possible earthquake strengthening issues made older buildings commonly found in town centres less attractive.

Bell thought shops found in The Mall were unlike those typically found in a CBD setting and complimented businesses in and around Main St - the city's main shopping area.

Council economic development manager Stuart Grant agreed. 'We have a luxury in Upper Hutt that the mall is of a size that supports the city.

'We're in a different position to other cities where there might be more competition between the main street and the mall.'

Wilkinson said Upper Hutt's CBD faced the same challenges as similar areas in other cities and towns.

As large retailers moved to The Mall, smaller 'mum and pop' business were left in the CBD. They often had limited appeal and variable hours which made shopping experiences less certain.

Many city centres were trying to gear themselves towards hospitality as traditional retailers disappeared. More people were also expected to start living in such areas which meant a growing demand for lifestyle and health services.

'Typically, food is the new anchor for town centres. People will always need their coffee and lunch.'

Wilkinson said Porirua was a good example of a city that was transforming its CBD with a focus on food and drink, and with shops that reflected the expectations of the local demographic.

Upper Hutt was already heading down the food and drink path but a challenge for the city was the lack of a well defined town centre or 'central axis' where such a precinct could be established.

The Mall had strong community support which other malls in the region had lost over the years, he said.

Retailers began pulling out of the of Wainuiomata Shopping Centre in Lower Hutt when competition from the nearby shopping precinct in Petone and Queensgate siphoned away customers.

In 2017 year the centre was bought by Woolworths NZ which runs a Countdown supermarket there.

Woolworths property manager Adrian Walker said the company was close to finalising a redevelopment plan for the centre but did not elaborate.

Johnsonville Shopping Centre is another mall that has struggled in recent years with optometrist chain OPSM and fast-food giant McDonald's leaving in 2017.

Wilkinson said that mall had been unable to attract business from many of the young families moving into the area.

Centre owners Stride received resource consent in 2017 to redevelop the site but progress has been slow.

'We have been working hard to secure pre-commitment from key prospective tenants. Any commitment to proceed with the redevelopment will be subject to commercial feasibility, securing relevant approvals and achieving leasing pre-commitment targets,' a spokeswoman said.