Malls turn to new ideas to fill spaces as big tenants move on and shoppers' habits change

Friday, 6 March 2020

Large shops and supermarkets opting for stand-alone space are leaving big gaps to fill in Christchurch's shopping malls.

The Palms, South City, The Colombo, Northlands and the Bush Inn Centre are among Christchurch malls with surplus space where big tenants have gone, or are going.

In an era of online buying and home deliveries, malls are finding old strategies to fill their buildings no longer necessarily work. Overseas, some mall owners were putting in hotels, offices, experimental food spaces, gyms and even apartments.

'Shopping centres in general … have relied on supermarkets to bring in the foot traffic,' said Andy Bell, who manages Bush Inn Centre for its owner Ganson Group. But those days were gone, he said.

Boxing Day sales brought crowds of shoppers to Westfield Riccarton.

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South City saw New World move out to a purpose-built supermarket over the road.

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First Retail Group managing director Chris Wilkinson says malls need to know their customers.

At The Palms in Shirley, owned by AMP Capital, Kmart is preparing to move out into a new store at the new Northlink drive-in shopping centre in Papanui.

The mall also faces losing its Countdown supermarket, as owner Woolworths has bought land further north on the same street, but has not yet announced plans to move.

Large discount pharmacies are a growing trend in malls.

A spokesperson for The Palms said they did not yet have a new tenant or tenants signed up for the large Kmart spot. 'We continue to work through our options,' the spokesperson said.

Northlands Shopping Centre, which has recently upgraded its dining precinct, will lose an anchor tenant as Pak'N Save is about to start building just up the road.

Kmart stays open until midnight and is leaving The Palms for Papanui.

At South City, owners the Stirling family have secured Chemist Warehouse to fill half the space left when New World moved across the road last year.

The mall is still to fill the remaining half, something Nigel Stirling believes will happen when the new tenant starts trading next month.

The Colombo is working on 'a couple of concepts' to fill the gap left when craft store Spotlight moved into purpose-built premises in Moorhouse Ave, manager Caroline Cooper-Dixon said.

While any announcement was several months away, Cooper-Dixon said they were aiming for the same feel as the rest of the centre, which has gone after a particular demographic with high-end fashion, food and giftware tenants, plus an art cinema.

'We come up with a target and then go out and chase the tenants. We don't exactly put a 'For Lease' sign on the window,' she said.

Spotlight built a $20m flagship store and has vacated these premises in The Colombo.

Bush Inn is still filling the gap left when Countdown supermarket left in 2018, and the old Smith's City store vacated two years ago sits empty. Briscoes opted for a free-standing space alongside it.

The Smith's spot has been earmarked as an entertainment precinct, including an escape room, interactive golf, and a virtual reality experience, but the mall is yet to sign tenants.

Provedore food market at Bush Inn Centre in Christchurch.

AMP's The Palms shopping centre has three anchor tenants, Countodwn, Kmart and Farmers.

The new Provedore boutique food area has only a handful of tenants open, but is 80 per cent leased and will eventually have about 25 businesses including a mini grocery store.

Evan Harris, of real estate firm Colliers, manages South City. He said big anchor stores leave for two main reasons: if they are doing badly, or because they are trading well and want more space and longer hours.

'When those anchor tenants go, it can have a significant impact on other shops and they're not easy to replace.'

Chris Wilkinson, a retail consultant and owner of First Retail Group, said Christchurch had a lot of mall space before the earthquakes. It now had a shiny new city centre competing for businesses, and retail development elsewhere including the airport.

He said there were plenty of choices for tenants, but too few to go around. 'There just aren't enough people there. It's just spread so thin, so there's very little cream in it for anyone.'

Inside the malls, boutique food areas were proving more important. 'Hospitality is our new anchor, once upon a time it was retail.'

While retail sectors including fashion were not thriving or expanding, health services like dentists, eyesight and hearing services, beauty and skincare clinics and nail bars were doing well in malls.

Suburban mall owners needed to create 'an escapist environment' – 'people want to feel they are enjoying themselves … rather than shopping being a chore'.

Andy Bell agreed competition for tenants was hot.

'Every retailer with a pulse in town is being chased by every developer in the city,' he said. 'There's a lot of space available and it's not Los Angeles, there are not that many retailers.'

Bush Inn too was chasing shoppers with more discretionary cash, Bell said.

'A few years ago it was just the numbers, and we just filled them [malls] with people. Now its about the demographics.'