This exclusive CEO Outlook contribution by Kylie O’Connor, Stockland is featured in the latest edition of SCN magazine.
This year, we are focused on active management of our optimised town centre portfolio and execution of our development pipeline to deliver new centres to meet the needs of Australia’s growing population and address constrained retail supply.
Population growth, largely driven by net overseas migration, is a key demand driver for Australian retail with our population projected to increase from approximately 27.1 million in 2024 to 31.3 million by 2034-35*.
As Australia’s leading creator and curator of connected communities, we help more people achieve the dream of home ownership so we are well-placed to respond to the drivers of population growth and demand for housing and retail.
We’re creating vital community infrastructure, with a pipeline of new town centres and community real estate assets, such as child care and medical centres, to meet the needs of first home buyers and young families looking to set up their home in Australia’s newest suburbs.
Building in our own backyard
We’re currently building three new town centres in our own backyard at our masterplanned communities – The Gables in north-west Sydney, Sienna Wood in Perth, and Providence in the heart of the Ripley Valley in the fast-growing South East Queensland corridor.
All centres are in construction with each centre anchored by a leading supermarket and childcare centre and complemented by speciality retailers that are curated to meet the needs of the community.
Our ambitions for Aura’s town centre have also progressed with our recently submitted plans setting the foundation for a dynamic mix of shopping, dining and lifestyle experiences at one of the largest masterplanned communities in Australia.
Optimising our town centre portfolio
Last year was mixed for both our customers and our retail tenant partners, with cautious consumer spending due to cost-of-living pressures and higher interest rates, and some improvement towards the end of the year with stronger sales results in the key trading windows.
Stockland’s optimised town centre portfolio has a 70% MAT weighting to essentials-based retailers, underpinning the high occupancy and stable performance. The portfolio has delivered positive leasing spreads for seven consecutive half-year periods. We’ve also seen some stabilisation and uplift in discretionary categories, like apparel, jewellery and homewares.
Demand for prime retail space
Along with trading conditions, the demand for retail space is expected to recover in 2025.
The tightening of retail space is an opportunity for us to work closely with our retail partners on their requirements and how the right space in the right location can drive productivity and business goals, from e-commerce integration to campaigns.
Last year, we welcomed some new mini majors to our town centres that are committed to making their spaces work harder while meeting the specific appetites of their customers, from JD Sports showcasing its exclusive range of trainers to off-price retailer TK Maxx with a format that appeals to a value-conscious customer with a flair for designer labels.
In November, we were excited to open the first two Flying Tiger Copenhagen stores in Australia at Stockland Wetherill Park and Stockland Shellharbour. The Danish design-led variety retailer offers a fresh, unique concept that resonates with customers looking for something special at an affordable price.
For our part, we continually remix and reposition to optimise our town centres and focus on what’s important to our customers and retailers. Our customers not only come to the centre for their everyday essentials, but also to connect with the community so it’s important our spaces are inclusive, accessible and engaging.
Last year, we opened Point Social, a refreshed place to play, dine and connect at Stockland Point Cook. Point Social seamlessly connects to the new look Town Square and Point Cook Pop Up Park, which is a pedestrianised local road that has become a heart for external play and community events, like the annual multicultural festival, Kaleidoscope.
The rewards of experiential retail
In their search for rich, engaging and immersive shopping experiences, consumers will continue to be wowed by retailers that transform their stores into multi-faceted destinations that provide value beyond the products being sold.
Pop-ups offer new and emerging retailers the opportunity to enter the market quickly and flexibly before transitioning to something more permanent, while established retailers can use pop-ups to flex beyond their boundaries for new product launches and campaigns.
Our pop-up and activations business, S Connect, is seeing an increase in this trend in our centres, with retailers looking at omni-channel integration strategies to expand their reach and align with consumer demand for convenience and engagement.
The magic of special events
Special events play a pivotal role in attracting foot traffic and deliver unique moments that draw shoppers in, resonate with customers and enhance their overall visit.
We started the year with a Sonic boom, teaming up with Paramount Pictures on the Australian release of Sonic the Hedgehog 3, one of the entertainment company’s most successful movie franchises.
Our third collaboration with Paramount Pictures involved a takeover at Stockland Green Hills and a tiered campaign across our entire town centre portfolio over the school holiday period.
The partnership was incredibly successful with portfolio traffic achieving strong growth for the month of January of 1.8% and MAT growth of 4.2%. The campaign exceeded social and digital targets with a social reach of 10.5 million and a 40% year-on-year database growth for the month of January, enriching our first-party data to benefit future campaigns and collaborations.
It’s an exciting time for Stockland as we continually optimise our town centre performance for our retailers and customers and work towards cutting the ribbons at our new centres in our communities where we can build on our connection and understanding of our customers.
We look forward to working alongside our partners in 2025.
*Why Australia Won’t Recognize Itself in 2034 – The Startling Population Growth Forecast Revealed!
SCN’s Premium members can view the full CEO Outlook feature in the latest edition of SCN magazine.
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