Kmart latest to announce plans as big stores turn backs on Christchurch malls
Wednesday, 1 May 2019
Christchurch shopping malls are facing a shake-up as several big retailers move out of malls and into big new stores.
Kmart is the latest to announce plans, confirming it will leave The Palms Mall in Shirley after 23 years to go to a new store in Papanui.
The move is part of a trend towards big stores wanting independence. Others under way include New World closing its South City supermarket this weekend for a relaunch across the road, and Spotlight's new build on Moorhouse Ave as it prepares to leave The Colombo by Christmas.
Australian-owned Kmart Shirley announced to staff on Wednesday it would open its new store in the new Northlink shopping precinct on Langdons Rd early next year. The new 4500-square-metre store would have the 'fresh store layout' the chain is rolling out nationally and 600 car parks, the company said.
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The 3700sqm purpose-built New World will open on Durham St in the central city on Wednesday next week. Its smaller South City store will shut on Sunday evening, after being part of the mall since the 1990s.
A spokeswoman for The Palms owner AMP Capital said it was 'currently exploring options with potential tenants' and looked forward to announcing a new tenant for Kmart's space 'in due course'.
She said other than Kmart, they did not have any other stores moving out.
While there had been a population loss with the earthquakes, the Prestons subdivision was bringing people back to the area, she said.
Countdown, another big Palms tenant, has bought land further north on Marshland Rd. However, a Countdown spokesperson said they had no immediate plans for the land, or to move away from The Palms.
Evan Harris of Colliers, whose team manages South City, said they were looking at design options for the mall's supermarket site and would divide it into new stores opening towards Durham St.
There were talking to two possible anchor tenants – one a fashion store and the other a general retailer – both Australian-based. There would also be room for several smaller shops in the space, which could include some food stores, Harris said.
'We want to redo the whole Durham St end, so people will be able to walk through from the street.'
They hoped to have a final renovation plan for that end of the mall within three months, and would start work on it this year, he said.
Harris said with the new supermarket and new Spotlight nearby, plus other new stores on Moorhouse Ave, the area was 'becoming quite a major destination for shoppers'.
South City was bought for about $50m a year ago by Otago businessman Terrence Stirling.
Spotlight's lease at The Colombo runs until the end of 2021, with rights of renewal, and the retailer has said it may sublease those premises. The Sydenham mall is owned by local investor Lilly Cooper and is for sale.
Retail consultant Chris Wilkinson, of First Retail Group, said the moves were all part of a trend of major stores wanting their own sites as retailing evolved.
'We are seeing a lot less of supermarkets in malls.'
Leaving a mall made it easier for stores to have longer trading hours, especially for stores like Kmart, which opened until midnight. It also let them control costs, access and car parking, he said.
'Businesses are taking the opportunity to relocate somewhere that better meets their needs. It allows them to develop their own identity and not have that masked by a mall.'
Figures from commercial property valuers Telfer Young show Christchurch retailers are paying annual rents of up to $1500 a square metre in suburban malls, and up to $1200 in the central city.
The company's latest report on Christchurch retailing said while there was tenant demand for space in the central city, demand for space in suburban locations had reduced.