Putting on a great show every day
The Scentre Group team is tackling 2019 with our trademark energy and drive as we continue to deliver on our purpose of creating extraordinary places, connecting and enriching communities.
We are listening and responding to changing customer expectations to create superior experiences that connect customers with our retail partners and increase visitation and advocacy.
Annual visitation across our platform of 41 living centres in Australia and New Zealand has grown to 535 million, resulting in continued strong retailer demand for our high-quality destinations. Customer advocacy has increased across all of our living centres, demonstrating our focus on the customer and understanding what they want is working.
Retail remains one of the most dynamic sectors of the economy. There is no room for complacency and we are well placed to take advantage of core market fundamentals.
Strong population growth continues to drive the Australian economy, supporting housing demand, consumption, infrastructure requirements and labour supply. In New Zealand, we’re seeing the fastest rate of population growth in the OECD.
Both Australia and New Zealand are among the world’s most urbanised countries, with more than 85% of Australians and New Zealanders living in urban areas and cities.
At the same time, the size of our households is shrinking, with single-person households expected to reach 30% of all Australian households within the next decade.
These trends are changing the way people spend their time between home and work, and how they use public spaces to exchange ideas, relax, socialise and build relationships in their local communities.
Humans are social beings. Our customers come to their local Westfield living centre for much more than shopping – they want to engage and socialise with family and friends. Our customers tell us they want more experiences – dining, entertainment, health, fitness and beauty services. Increasingly, our customers are consuming on site.
These changing customer expectations are reflected in the increasing amount of space that offer experiences. In 2018, more than 35% of stores across our platform offers experiences that our customers consume on-site such as restaurants, beauty and entertainment.
This focus on delivering what the customer wants is driving visitation. In 2018, more customers visited Westfield living centres, they visited more often and spent more time at our centres than ever before.
We have reorganised our business focus around our customer, and driving and increasing frequency of visitation.
This shift has meant our centres are more focused than ever on day-to-day experience delivery – putting on a great show every day – to drive Net Promoter Score (NPS), customer engagement and frequency of visit.
When we look at our NPS scores, all of our centres have more promoters than detractors, and the majority of our centres increased their NPS over the past year.
These dynamic customer insights are essential for us to deliver a consistently superior customer experience and attract the world’s leading brands.
Reading the news headlines, it is tempting to believe that physical retail space is less valuable now than it has been. We don’t share this view. Extraordinary retail is strong, vibrant and growing. Smart and savvy retailers – those brands who stay close to their customers, have a unique product offering and measured distribution channels – continue to thrive and plan their growth with us.
The success of extraordinary retail is evident across our portfolio, with 437 new brands introduced into our living centres and 317 existing brands growing their store network with us over the past year.
As we evolve our portfolio into living centres, understanding the true value of the space that we lease to our retail partners is crucial to our success.
The physical store is influencing sales across all channels including in-store, online and marketplaces as well as enabling ‘click and collect’ and last mile distribution.
Extraordinary retailers understand the value of their physical space in the retail ecosystem and leverage the ‘network effect’ of their physical presence. They are working to engage their customer; to keep their brand in the customers’ consideration regardless of where a sale is made.
Physical retail space remains the most cost-effective way to build and drive a brand. And with occupancy across our portfolio at more than 99%, it is clear that demand for high-quality retail space that enjoys high traffic flow remains strong.
With more than 535 million customer visits per year, and around 65% of the total Australian and New Zealand population within 30 minutes’ drive of a Westfield living centre, we are confident in our ability to continue to grow customer visits and attract new and grow our existing extraordinary retail partners.
In 2018, we successfully opened more than $1 billion worth of redevelopments across four Australian states. Each of these redevelopments was designed to elevate the customer experience, curate a tailored offering relevant for the local community and be the best location for our retailers to succeed.
The completion of our first greenfield living centre, Westfield Coomera, in Queensland’s Gold Coast is an example of how we have curated an exceptional retail, services and entertainment product mix. A key feature of Westfield Coomera is a purpose-built and expertly curated outdoor space for children and families, The Backyard.
In NSW, Westfield Kotara welcomed a new youth and urban precinct, making it the fashion, dining and lifestyle capital of the Hunter. The centre is now home to Newcastle’s first and only Zara, along with H&M, Kmart, JB Hi-Fi and approximately 30 new specialty retail stores.
We opened our $350 million Westfield Carousel redevelopment in August 2018, delivering Perth’s premium retail and lifestyle destination. The centre attracted high demand, with a number of first-to-WA retailers, the latest-format David Jones and 70 additional stores, including international brands such as H&M, Uniqlo and JD Sports, as well as 20 new restaurants in a vibrant open-air rooftop dining and entertainment precinct. The entertainment offering is the first of its kind with iPlay Adventure including Clip N Climb, high ropes and arcade games, as well as Coomera’s The Park, which features a bowling alley and mini golf.
In 2019, we will continue to focus on investing in unique and strategic opportunities within key growth corridors across Australia and New Zealand.
In Sydney, we are excited to be moving ahead with plans to expand Westfield Sydney – the city’s home of luxury – to the adjacent David Jones Men’s Store when David Jones’ vacates in mid-2020.
At the heart of these plans is the unequalled opportunity to transform an iconic site from Sydney’s past into a contemporary precinct offering experiences and ambience that reflects the lifestyle and aspirations of Sydney as a global city.
It will also build on Westfield Sydney’s reputation as the city’s home of luxury. Since we opened this flagship centre in 2010, we have tripled the number of luxury retail brands from 11 to 36 luxury retailers. We are experiencing a wave of luxury brand rejuvenation and renewal in this centre, driven by strong customer demand from selective and discerning local and international customers, drawn to our flagship centre by a wave of new luxury retailer openings including Moncler, Valentino, Balenciaga, Berluti, Chaumet and Loewe, among others.
The growing Perth market also presents a significant opportunity for our business. We already have a substantial presence in WA, with local assets valued at approximately $2 billion. Between 2017 – 2022, our new investment in WA is expected to be about $1 billion.
The redevelopment of Westfield Stirling will see the centre almost double in size and transform to become Perth’s ultimate living centre. With the addition of two new retail levels, international fashion brands, a relocated David Jones department store and more than 220 specialty stores, Westfield Stirling will set a new benchmark for retail in Perth’s north-west. The landscaped rooftop dining, leisure, and entertainment precinct will incorporate a relocated 14-screen Event Cinema complex.
In New Zealand in 2019, we will open a world-class retail, lifestyle and entertainment destination in the heart of Auckland, Westfield Newmarket. The NZ$790 million redevelopment will be home to Auckland’s first David Jones department store, a new-format Farmers department store and the best in local and international fashion, dining, retail, leisure and entertainment, making it NZ’s flagship Westfield living centre.
We are confident the end-product will be something quite special for New Zealand and, when completed, will play a role similar to that which Westfield Bondi Junction plays in Sydney.
I’m excited about the year ahead. We will rise to the challenge of creating the extraordinary for our customers and continue evolving our portfolio to ensure we are providing unparalleled and highly curated destinations and experiences at each of our living centres.
Our portfolio is resilient and well-positioned for future success because our customers remain at the heart of our decision making and innovation. This is the reason our portfolio continues to be the first choice for both new and established retailers to grow their brands and businesses.
About Scentre Group
Scentre Group was established in 2014 and our purpose has remained constant ever since: ‘creating extraordinary places, connecting and enriching communities’.
Our extraordinary platform of 41 living centres is valued at more than $54 billion and generates $24 billion of annual retail in-store sales across 11,500 outlets representing a diverse range of more than 3,500 brands.
We own 16 of the top 25 centres in Australia, and four of the top five centres in New Zealand. More than 35% of our portfolio generates annual retail sales of greater than $1 billion, and more than 80% generates annual retail sales of greater than $500 million. More than 7% of all retail sales in Australia occur in Westfield living centres. Our annual customer visitation is more than 535 million.
During 2018, we introduced 437 new brands and 317 existing brands grew their store network with us.
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