Optimism Returns to Retail as $800m Karrinyup Redevelopment Opens

AMP Capital has completed an $800-million, three-year redevelopment of the Karrinyup Shopping Centre in anticipation of a rebounding retail sector heavily impacted by the global pandemic.

But things are looking up for the beleaguered sector with Australian Bureau of Statistics data showing a 1.3 per cent increase in trade month-on-month, and a 1.7 per cent increase compared to September, 2020.

Results of CBRE’s Asia Pacific Retail Flash Survey also painted a brighter picture for the future of retail.

Three-quarters of retailers surveyed said they were expecting the tide to turn in 2022, and 68 per cent said they would be pursuing omnichannel retail, where bricks and mortar stores would fulfil online orders, cementing ongoing demand for retail assets.

Almost half of retailers said they were looking to move to quality retail spaces or renegotiating existing leases.

AMP Capital almost doubled the retail space on offer at Karrinyup Shopping Centre, 12km north of Perth’s CBD, taking it from 59,874sq m to more than 109,000sq m and 290 retail stores, in addition to an outdoor entertainment and dining precinct.

The group has also undertaken a $100-million, 94-apartment development, with more than 80 per cent sold off the plan.

A three-building development for 270 new dwellings and commercial tenancies has also won approval on the western side of the site.

AMP Capital global head of real estate Kylie O’Connor said the development showed AMP Capital was “embracing the future of retail and mixed-use development”.

“Our vision for this project has always been to create an integrated development, which embraces a live, work, play approach and in a first for Perth, Karrinyup Shopping Centre now offers access to a genuine mixed-use precinct for all to enjoy,” O’Connor said.

“The successful completion of the development at Karrinyup Shopping Centre underscores our track record and expertise in real estate development and funds management.”

Karrinyup Shopping Centre owner UniSuper’s head of property Kent Robbins said it was a “proud moment” to see the centre completed alongside project partners AMP Capital and Multiplex.

“This redevelopment addresses the community’s expectations to provide not just best-in-class retailers, but also a diverse range of entertainment, dining, wellness and service offerings,” Robbins said.

“We look forward to the ongoing partnership with our retailers, local management and the broader Perth community, including UniSuper’s Perth-based members.”

While just 10 per cent of retailers surveyed by CBRE have reported sales performance exceeding pre-pandemic figures, most are upbeat about retail in 2022.

Sentinel Property Group announced earlier this year it would join a growing number of owners of retail assets to convert unused portions of their properties to office and professional space.

The Brisbane-based fund manager’s chief investment officer Warren Ebert said the retail sector was undergoing significant changes due to the advent and challenges of Covid-19.

As a result, it has repurposed part of its DFO Cairns retail complex for office and medical services space.