Revamp of Westfield Albany shopping centre is on the cards as well as expansion

Wednesday, 10 April 2019

Giant Australasian mall owner Scentre Group is eyeing another Kiwi redevelopment - this time its Westfield Albany shopping centre, north Auckland.

Australasian mall owner Scentre Properties is planning to redevelop its Westfield Albany shopping centre. Pictured is its biggest mall in New Zealand at Riccarton in Christchurch, soon to be surpassed in size by Westfield Newmarket when it opens this year.

It is only months from opening its $790 million expansion of Westfield Newmarket in Auckland central, last week announcing a staged opening before the end of the year which may start as early as July.

Scentre and its Singaporean partner Newco Albany have just secured Overseas Investment Office (OIO) approval to buy almost 3 hectares of sensitive land from Woolworths to expand their Westfield Albany shopping centre.

The land is classed as sensitive because it is on the boundary of a reserve, the Albany Lake Reserve.

Westfield Albany may have another supermarket, Countdown, when it expands.

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Scentre's annual result, released in February 2019, showed Scentre had A$3 billion of future investment planned and Westfield Albany was on the list.

But at this stage Scentre said its redevelopment of Westfield Albany did not include the 2.94ha of sensitive land.

NZ's biggest mall Westfield Newmarket will open between July and September this year.

'We are expecting to lodge a development application for a proposed redevelopment of Westfield Albany in coming months. At this stage, this newly acquired parcel of land does not form part of our proposed plans.'

A spokesperson said it was too early to give any more details.

Scentre and Newco Albany bought the sensitive land at 22 Don McKinnon Drive, Albany, from General Distributors. owned by Australian supermarket operator, Woolworths, owner of the Countdown brand in New Zealand.

Retail sales at Westfield Albany in 2018 topped $422m.

The price paid by Scentre was not disclosed.

The Overseas Investment Office said the amount had been withheld under the Official Information Act because Scentre said it was commercially sensitive.

'The OIO will review whether this figure can be released within the coming year.' the OIO said.

According to the QV.co.nz website, the July 2017 rating value for the 2.94ha of Albany land was $24.95m.

Westfield Albany is home to 146 retailers and has a gross lettable area of 53,325 square metres. Its anchor tenants included supermarket New World, Farmers and Kmart.

In 2018 it reaped $422.8m in retail sales, according to Scentre's property compendium.

The New World at Westfield Albany may face new competition in the future.

The OIO decision said the seller of the sensitive land was planning to set up a supermarket at Westfield Albany.

'The applicant sought consent to purchase the investment as it would enable it to expand its existing shopping centre in Albany,' the OIO decision said.

Retail sales at Westfield Riccarton were more than $535m in 2018, the highest of the five Westfield malls in New Zealand.

'The vendor will lease premises to operate a supermarket in the applicant's development,' the OIO said.

'The benefits that are likely to result from the investment include the creation of a substantial amount of new jobs in the construction and retail centres, the introduction into New Zealand of additional capital to develop the investment, and the investment by the vendor in the fit-out of its new supermarket.

'The applicants also have proven track record on investment that has provided benefit to New Zealand,' OIO said.

First Retail Group managing director Chris Wilkinson said stores were already trading well in Albany whose population was growing strongly and better transport and roads made it easier to reach.

'The future for shopping centres are very large shopping centres which command a presence,' Wilkinson said.

'These are the types of centres which will succeed in the future.' Smaller malls built in the 1960s and 1970s were already struggling.

An expanded Westfield Albany would 'be good for the consumers and good for the retail sector,' Wilkinson said.

Auckland Council classes Albany as one of three significant growth nodes outside the Auckland central city.

'Albany has significant opportunities for additional business and residential growth.

'It is a focal point for future employment, business activity, social facilities and services all of which will support a growing population,' The Auckland Plan 2050 said.

Scentre Group owns 36 Westfield malls in Australia and five in New Zealand, and has $54.2 billion of assets under management.

The compendium shows the five malls in New Zealand are owned 51 per cent by Scentre Group and 49 per cent by GIC, Government of Singapore Investment Corporation, a government-owned company managing Singapore's sovereign wealth fund.

Westfield shopping centres in New Zealand

Riccarton, Christchurch, 55,568sqm, 196 tenants, $535.6m sales, 2018.

Albany, north Auckland, 53,325sqm, 146 tenants, $422.8m sales.

Manukau City, south Auckland, 45,262sqm, 189 tenants, $293.4m sales.

St Lukes, Auckland, 39,751sqm, 174 tenants, $363.1m, sales.

Newmarket, central Auckland, under construction, completed 88,150sqm.