CEO Outlook 2024: Chris Barnett, GPT

In building his reputation, Ritz had a well-known personal slogan; ‘Le client n’a jamais tort’. Translation: ‘The customer is never wrong’. That attitude underpins many successful hotel chains today, and is a major reason Ritz Carlton hotels are still considered the benchmark. Internally, the company’s motto that is culturally ingrained within its staff simply declares, “We are Ladies and Gentlemen serving Ladies and Gentlemen,” and, as such, customers know that when they stay at a Ritz Carlton, they will be treated like royalty. Staff don’t spend time questioning customer complaints but instead work to immediately resolve issues and ensure their needs are met. No matter what transpires, they act in accordance with their founding principle that the customer experience comes above all else. Providing the best experiences At GPT, we also work to understand people’s needs and shape our places around their journeys. We focus on what matters most to our customers – a great experience. It sounds simple, but in an environment where we are constantly competing for their time, attention and spend, providing customers with meaningful moments they cannot have anywhere else is what earns their loyalty. Each day, we push new ideas to deliver exceptional outcomes as we curate our assets to drive retailer sales productivity. I started 2023 optimistic the GPT Retail portfolio would continue to perform well against a pessimistic outlook, and as I reflect and celebrate the past 12 months, the continued strong performance can be attributed to our brilliant people who have been successful in partnering with our retailers and understanding customers to continually improve their experiences at our assets. As Australian retail sales growth continued to be supported by low levels of unemployment, high household savings and population growth throughout the year, we saw a mass return to bricks-and-mortar as physical stores continued to recapture market share from online, with more than 90% of all retail spending in Australia now involving a physical retail shop. This resulted in another productive period in which GPT achieved record leasing and sales results across the retail portfolio. Melbourne Central continued its remarkable recovery and is now exceeding pre-pandemic retail sales performance. Strong leasing demand, including being a favourite for first-to-market retailers, means the centre is now back to pre-pandemic occupancy, fully leased. Evolving from a CBD workers’ place of convenience to a weekend destination for many, the asset has become a ‘must-do’ tourism attraction in Melbourne off the back of unique offerings like Monopoly Dreams, which is bringing the highest-selling board game of all time to life. Melbourne Central Ernie Activation Highpoint Shopping Centre has also continued to go from strength to strength and the centre is benefitting from the successful introduction of Coles and Foodle Asian Grocery + Kitchen, with the unique all-in-one restaurant, grocer and take away destination proving to be an immediate hit with customers. Melbourne’s largest retail destination west of the city, Highpoint is effectively fully leased, continues to outperform and is well-positioned for future growth. And when an asset is in a mode of high-performance it provides opportunities to capitalise on customer demand and introduce experience-based retailers including Australia’s first SuperPark, an indoor playground wonderland for kids, youth and adults and Tom’s Confectionery Warehouse, the world’s largest Pick ‘N’ Mix which boasts more than 1,000 different candies and chocolates from across the world. Pacific Fair Shopping Centre maintained its position as one of Queensland’s leading retail destinations, underpinned by its celebrated customer experiences and attractions. The centre draws international tourists and rolled out the red carpet for major Hollywood stars after being selected as the screening location for the Australian movie premiere of Elvis, and more recently made global headlines off the back of a surprise visit from Sydney Sweeney. The centre has become an established landmark for activations and experiences in the eyes of shoppers and retailers around the country. Pacific Fair’s recent win at the 2023 Australian Service Excellence Awards is a testament to the team’s dedication to provide exceptional retail experiences for shoppers every day, with the centre taking home the ‘Customer Service Team of the Year – Large’ award. Pacific Fair Beauty Weekend A return to normality While retail encountered an unpredictable period coming in to 2023, we continued to deliver by leaning firmly into our strategy. While there is a level of ambiguity around how 2024 will play out, I am anticipating a year more akin to the normality we would historically expect. A year where many hope to see inflation settle following an onslaught of cumulative rate hikes, and a return to more normalised growth patterns. I expect we will also continue to benefit from an increase in tourism. A shortage of retail development will tilt demand towards the best quality assets, and while this shift will provide opportunities for centres requiring upgrades, we can expect retailers and shoppers will continue to gravitate to those well-established centres that are known to deliver exceptional customer experiences. As the economy settles, consumer shopping habits will also naturally adjust. ‘Discretionary items’ remained a hot topic in 2023 and the definition has evolved over the course of last year and into 2024. Despite rate rises, we’ve observed an increase in demand for ‘feel-good’ services such as car washes, hair and beauty and categories such as cosmetics; not the type of purchases we typically expect against the current macro backdrop, revealing that shoppers are increasingly making decisions based on what is visible. As retail trends continue to evolve through the year, consumers will continue to demand a seamless experience across all touchpoints, from online browsing to in-store interactions. Retailers will need to leverage data to personalise product recommendations, promotions and customer service, creating a more engaging shopping experience. Adapting to the ever-evolving customer As the customer and the characteristics that define their habits evolve, we adapt and innovate our strategy to continue creating leading experiences that engage and excite them. For many retail customers the journey begins in the digital realm, on a social media platform or online, and we continue to investigate how we can use technology to better understand our customer needs, pre-empt their expectations and evolve our in-centre experiences. We know that social media platforms will play a growing role in marketing across the board, with increased e-commerce functionality becoming readily available and more brands utilising these tools. Social media platforms will be an increasingly important factor in retail, with influencers driving sales, shoppable content and product awareness. Our asset social pages have proven to be an effective channel to communicate and attract customers, with short-form video content campaigns tailored to each audience base driving strong engagement. One of our favourites last year came out of our ‘Win Groceries For a Year’ national fresh food campaign. Curated recipe content was shared across the GPT retail portfolio’s digital and social channels, and included a ‘Dorito Taco’ recipe video that went viral, generating more than 30 million views for Highpoint alone. We will continue to generate high quality digital content for national and tailored asset level marketing campaigns to engage, educate and inform customers. Summer Cirq-tacular, Highpoint How we personalise our connection to customers and retailers will continue to be our core focus in 2024. Our customers are spending more time and money in our centres, and our retailers are opening for longer periods. While it would be easy to rest on our laurels with our numbers clearly demonstrating a strong level of satisfaction, we need to continue to create new ideas with customer loyalty front of mind, and so we are unrelenting in our efforts to understand, ‘What more can we do?’ Artificial intelligence (AI) will continue to grow its presence and use across business units, from sentiment analysis, sales forecasting, demand and inventory management, content recommendations and customer service chatbots a minor sample of the processes that will continue to improve efficiencies. Last year, we enhanced our CX Connex platform to better enable deep listening to our customers, and introduced an equivalent platform for our retailers with the creation of our RX Connex platform. Combining multiple forms of feedback including NPS, surveys and online reviews, the platforms utilise AI technology to classify text into sentiment scores. This extensive combination of processes in our platforms provides an authentic 360-degree picture of where we are performing well and where we need to improve. Early last year, we also introduced ‘Brand Scope’, a bespoke tool that leverages data from retail brands, our centres and our shoppers to identify the best prospective tenants for our centres. It considers a range of factors including existing brand penetration, shopper alignment, existing store locations and commercial considerations. By helping in the selection of the best retailer for a tenancy, Brand Scope is contributing to improved tenant retention, which is a win-win for GPT and our retailer partners. Leadership in sustainability is a broader strategic focus for GPT and through our relationships we know our retailers value the work we are doing in this area. We’re proud to have implemented sustainable practices that benefit the planet and generate positive commercial outcomes for investors and retailers, including the efficient use of waste water across all our retail assets and, pleasingly, all assets that GPT has an ownership interest in and manages, are now operating carbon neutrally. In short, understanding and delivering what our customer wants will drive success. We will continue to innovate and personalise our connection to customers in 2024, sourcing new channels to gather valuable data and using the insights to instigate positive change. The past few years have revealed that Australians are seeking leading experiences, and like César Ritz, GPT continues to emphasise our engagement with shoppers to ensure their needs are met, ideally, before they even know their needs. I remain confident that the year ahead will offer a continued positive trading environment for our centres and retailers, notwithstanding the challenges I’m sure we will face and overcome together.