Here, in an extract from an article originally published in the annual Big Guns edition of Shopping Centre News (March 2023), QIC Real Estate Managing Director Michael O'Brien outlines what the year ahead looks like for operators and partners of retail-led destinations.
For the retail industry, the pace of change throughout the pandemic has been unparalleled, but change is perhaps the one constant for the sector. At QIC Real Estate, it’s important to us that we actively manage our retail assets and work with our retail partners to fast-track innovation and seize new opportunities, while sustaining investment performance.
Our outlook for the forthcoming year is one of cautious optimism. The resilience of the retail sector during periods of uncertainty has never been more obvious, and provides confidence in how it will perform during another challenging economic cycle. We’re focused on building the inherent resilience of our portfolio of assets through highly targeted leasing and remixing strategies, and mini developments that leverage the five consumer megatrends we’ve identified – all to create vibrant destinations in local communities.
Our unwavering belief is that the shopping centre of the future will be a town centre – a place where communities can shop, eat and meet, as well as play, work, live and learn – unlocking significant embedded value, uplifting sales productivity for retailers, and securing the asset’s long- term position within its community.
With Australia facing economic uncertainty in the coming year, the retail industry must continue to remain dynamic to thrive and, I have to say, I’m optimistic about how our retail assets can be best positioned for continued resilience and success in 2023 and beyond.
QIC is continuing to execute on our long-held investment strategy to evolve our shopping centres into town centre destinations through a considered and staged mixed-use development pipeline. Our portfolio of highly productive assets provides a favourable canvas for this evolution, particularly our larger assets such as Eastland, Robina Town Centre, Canberra Centre, Castle Towers and Watergardens.
We believe town centres should be individually tailored to the unique needs of the communities they serve, offering the convenience, accessibility, connectivity and amenability of a city. Extending a shopping centre beyond the traditional retail environment contributes a stronger economic outcome through the inclusion of mixed uses such as commerce, health services, education, accommodation, and civic and cultural experiences.
This in turn produces a catalyst for further public and private investment into the local economy and the retail core within these town centres, unlocking significant embedded value. Over many years, we’ve been strategically acquiring adjoining land and working in partnership with local and state planning authorities to unlock zoning, density and height limits, and there are now significant opportunities for value-add developments at our assets.
A key strand of QIC’s development work in 2022 focused on activating day-to-night economies, as part of our broader mission to foster town centre vibrancy, jobs, and a sense of community. In Canberra, we unveiled the first stage of a multi-venue dining precinct (pictured top) curated by celebrated chef Shaun Presland with a focus on the cuisines of Japan, China, South Korea and south-east Asia. Once completed later this year, Tiger Lane will enable CBD office workers and shoppers to engage with diverse food and drink cultures in the way typically associated with Chinatown districts in Sydney and Melbourne.
We have lodged a development application to develop the first Woodward action sports hub outside of the US. Not only will such a facility set a new benchmark for action sports development in this country when it opens as proposed in 2024 at Castle Towers; it will also address the shortage of recreation spaces in the area and draw new visitors to the doorsteps of our retail partners.
We have also been particularly active in suburban office accommodation this past year, including completing an A-grade tower opposite Eastland for the Victorian Department of Transport, and breaking ground on an all-electric workplace just next door at 5 Bond Street. Bringing in these CBD-standard workspace solutions, and attracting vital public services such as the new VicRoads customer service centre, marks a significant step forward in the evolution of Eastland into a commercial, civic and lifestyle hub for Melbourne’s east.
In December, we cut the ribbon on a four-storey office at 198 Robina Town Centre Drive, heralding an exciting chapter for strengthening employment opportunities and workplace culture on the Gold Coast. The mural-adorned building features premium end-of-trip facilities and state-of-the-art energy efficiency measures, and adds to the growing portfolio of government and professional services available at Robina Town Centre.
We also did not rest in reviewing and reengineering the core of our business either, completing significant retail upgrades at Eastland and Westpoint. At Eastland, The Circuit athleisure precinct is proving a hit with Ringwood’s health-conscious residents after a bumper opening fortnight of activations in June that included a competition prize haul equivalent to $80,000. At Westpoint, we undertook more than $50 million worth of ambient upgrades across two levels of the centre and introduced an array of youth-focused brands including Uniqlo and Harris Scarfe, as well as high-performing apparel and personal care retailers, to better serve the needs of the young and ambitious Blacktown community.
Recently, QIC conducted research that identified five consumer megatrends actively shaping the behaviour of Australian consumers – self-improvement and wellbeing, social and environmental consciousness, the experience economy, convenience and connectivity, and localisation.
We are producing a six-part Consumer Insights series with McCrindle Research that delves into these social trends and shopping habits, to help our retail partners refine and effectively market their products and services. The first of these was released in August, focusing on self- improvement and wellbeing, and the latest release looks at how population and housing shifts outlined in the last Census may influence the routines and purchasing decisions of Australian consumers going forward.
We are seeing consumers actively looking for ways to prioritise their beauty, health and wellness, and partake in more conscious consumption. They expect retailers to provide a memorable experience as part of their shopping experience, as well as easier and more efficient ways of completing their essential life needs, particularly in their local community. QIC has addressed these trends in our portfolio by doubling the floorspace we allocate to health and wellness since 2010 – from representing 4% of retail floorspace in 2010, to 9% in 2022. The findings from the deep dive into the self-improvement and wellbeing megatrend also highlights the critical role that retail-anchored mixed-use town centres can play in a community’s vitality.