QIC Global Real Estate

rategies and appreciate what motivates executives. Interesting because they’re all different; even when they’re in the same field; they may well have similar objectives but what they emphasise, distinguishes them from each other. At QIC Global Real Estate there’s a very distinct culture that stems from the way they view their projects. At QICGRE they don’t just see a shopping centre as a retail, leisure and entertainment facility, they see it as the centre of the town and that simple emphasis influences every decision. Castle Towers’ artist’s impression through various levels QICGRE sees its assets as long-term entities and that view permeates their whole philosophy; they take a ‘generational view’ – 25 years or more. The redevelopment of Castle Towers is a perfect example. Castle Towers opened in 1982, a ‘Little Gun’ in those days anchored by a Kmart, Coles and Norman Ross. Over the years since then, Castle Towers has been expanded to its present GLA of 113,000m2, gaining both David Jones and Myer Department stores, Target, Aldi and Event Cinemas along the way. It now has some 292 specialties, a Piazza, transforming it into a super prime regional with a land holding covering almost a kilometre of the main street – the true ‘town centre’ of the region. Its credentials are impressive; an MAT of $740 million with a specialty sales Top 10 Big Guns ranking at $13,778 per square metre. The centre sits in one of the most affluent trade areas in the country; average household income in the main trade area is $127,870, about 20% higher than the Sydney average of $106,502. It’s a dominant centre in the true sense of the word; Castle Towers’ trade area covers most of north-west Sydney with no major regional to its north; its closest competitors are to the south and east. Its expansion and evolution continues. Castle Towers’ masterplan The picture above indicates the enormity and sheer scale of the total proposed development; it’s an artist’s impression of course, subject to change, but the masterplan/visualisation shows the scope of the project and the validity of the statement that at QIC, they are about ‘space creation and multi-purpose development’ that is fundamental to their approach in developing town centres. The highlighted, multi-storey towers are all part of the QIC masterplan, spanning the entire length of the centre. Of course, it’s a multi-staged project, but the present extension and redevelopment is the springboard for the future. The catalyst for this latest stage is the opening of the Castle Hill station, Sydney Metro Northwest on May 26. This rapid transit system, Australia’s largest public transport project costing some $8.4 billion, connects Rouse Hill to Chatswood via Castle Hill and Epping. Initial frequency of trains is five minutes during peak hours and 10 minutes at other times. After a few months, when the service reaches full operation, the frequency will be increased to four minutes. Castle Hill Metro station, located 25 metres below ground, incorporates a major bus interchange and expects traffic of about 30,000 people a day across the metro. The station links directly into Castle Towers – passengers off the train go straight into Castle Towers without going outside – via a retail mall feeding right into the heart of the centre at the entrance to the Coles Supermarket. This whole area, including the Coles Supermarket, will be refurbished and reconfigured, providing a seamless connection into the new metro link mall. The first stage extends throughout all levels as the first stage of development in Zone 2 – see diagram above. On the lower level (link to Metro station) there will be a new food court and new mini majors. Coles supermarket has been completely refurbished, the area flanking its entrance will become a superb fresh food precinct of the highest quality – to join some existing strong operators such as Costi seafood, in addition to one of the best fruit and veg outlets in Sydney and one of the best butchers in the region. The upper levels – 2 and 3 – around the David Jones entrance, will be totally refurbished and reconfigured; it’s not just a cosmetic paint job either! There will be a new sleek void edge and planters, the floor tiles will be replaced, new balustrades and hand rails along with consistent column treatments as well as new ceiling treatments. Future stages will incorporate a new skylight and the vertical transportation will be reconfigured. So, the stage is set for the future Castle Towers. Zones 3 and 4 are in the planning stages and propose a massive upgrade to the piazza to be completed later this year – a new façade fronting the Old Northern Road, a richly landscaped area protected from the elements yet retaining the ambience of an outdoor space. Already the major players are in place and QICGRE have created a precinct for dining and casual hospitality anchored by Event Cinemas. There are several local favourites achieving the highest turnovers along with the popular Guzman y Gomez, Taste of Shanghai, Papa Rich and the Rockpool Dining Group’s The Bavarian beer tavern, to name but a few. Further down, part of QICGRE holdings are a group of heritage buildings including the original local school dating back to the 19th century. These will be completely restored and open to the public as a fully integrated retail and leisure precinct, which will include new F&B concepts, hospitality, a proposed hotel and high-rise. It’s not possible to quote an exact total project cost for the Castle Towers masterplan because each stage is its own project, but looking at the first stage (current) and beyond, a figure close to a billion dollars would not be an unreasonable assumption. Castle Towers sits at the epicentre of a massively expanding region. It’s located at the strategic centre of the state government’s plan for the expansion of Sydney. Castle Towers will benefit from – and integrate with – the government’s mandated transport and infrastructure projects, as well as commercial and residential developments. QICGRE’s vision – and more than that, their real and actual development currently underway – is reflective of their long-term strategies of both creating and evolving town centres. Castle Towers is, and will continue to be, transformed into a true community hub. The research, leasing, marketing and management is totally focused on the community. They’re developing a centre that will reflect the character of the Hills District community, their lifestyles and aspirations. At QICGRE they are on record as saying their goal is to create a true community hub, where the lines between civic, amenity, retail, shopping, culture, dining and entertainment, leisure activities, learning, living and work, all disappear. Castle Towers’ Total Trade area population is currently 494,832 with 421,005 in the Main Trade area. The region is the fastest growing corridor for Sydney’s expansion, hence the massive State Government expenditure on public transport as well as the extensions to the M1 and M2 motorways. Projected retail expenditure for 2021, the first full year after this latest stage is complete, for the Total Trade area is a massive $7.76 billion, of which, $6.67 billion will come from the Main Trade Area. The opening of this latest stage takes Castle Towers to 117,000m2; the current masterplan expands it to 146,000m2; SCN forecasts that Castle Towers will join the elite Billion-dollar club within the next four years! Move away from Sydney, indeed from NSW, to Victoria and the outer suburbs of Melbourne and QICGRE has a centre that could well be another Castle Towers in a backward time warp! Watergardens Town Centre Watergardens Town Centre opened in 1997 and was then a 29,000m2 ‘Little Gun’ anchored by a Bi-Lo, Safeway, Target and a Hoyts cinema complex. At the time, Taylors Lakes was the outermost suburb to the north-west of Melbourne, some 24 kilometres from the CBD. The main trade area housed less than 50,000 people; it was a sprawling region at the extremity of the outer Melbourne suburban spread. Household incomes were relatively low as a result of an above average family size and dependants living at home. But it was one of the strongest growth corridors designated by the state government and QICGRE took a ‘long-term’ view. The land acquisition in anyone’s book was enormous but, again, as with Castle Hill, it was at the epicentre of the community and expansion would emanate from that point. And again, the ‘town-centre’ strategy was in full flight as QICGRE’s first greenfield site. As QICGRE told us: “We don’t see Watergardens as a shopping centre. The site area is over 56 hectares – that’s over one-third the size of the Melbourne CBD. If you go from Parliament House on Spring Street and take in all of Chinatown on Little Bourke and across to the retail in the Bourke Street mall and all that’s in between – the cafés, restaurants, bars, the various specialties, the services and amenities contained in that area – that’s how we view the many experiences we want our community to encounter at Watergardens.” The new face of Watergardens Town Centre showing the redevelopment of the former Coles box now transformed into an active, vibrant frontage In 2001, QICGRE opened a 25,000m2 Bulky Goods complex containing a Bunnings Warehouse, Harvey Norman and six other tenancies. In 2006, a further three major stores – now a Fitness Centre, a major BCF store and a carpet warehouse – opened in another complex. In December 2002, another Supercentre was opened anchored by Spotlight, Good Guys and eight other tenancies – now including a Rebel Sport. In 2007, a major extension doubled the size of the original centre, adding a Big W, a second Safeway supermarket, another 100 specialties, an entertainment and leisure precinct and a further 1,635 car parks. The outdoor entertaining, leisure and dining precinct was ahead of its time, one of the first of its type in any Melbourne centre. The present scene is vastly different to that of two decades ago. Today, the Total Trade Area comprises some 356,779 people with a retail spending power of $4.4 billion; 161,000 live in the Main Trade Area with retail expenditure in excess of $2 billion. To get an idea of the enormity of this change, the region’s ‘coming of age’ as it were, and the subsequent development of Watergardens to satisfy the ever-increasing demand, one only has to visit the Big Gun statistics for the past five years. In 2015, Watergardens Town Centre, on the MAT/m2 ladder ranked 57 out of some 100 Big Gun centres. In 2016, with an MAT/m2 of $6,619, it had moved up three places to No. 54; a small increase in 2017 took it up to 53. In 2018, with an MAT/m2 of $7,351, the centre moved to No. 36. This year (2019) Watergardens Town Centre, with an MAT/m2 of $7,974 moved into the Top 20 at No. 19! It’s not difficult to see that the culture at QICGRE that drives its strategies and defines its vision is at the root of this progression. The sheer concept of ‘creating a town centre’ is evident here and no matter who you speak to, there’s passion and commitment; they don’t just look at the usual statistics either, the customer sits at the heart of all their decisions. At Watergardens, we learn there are 217 nationalities; there’s a ‘pioneering’. We’re told that here in the trade area, people are building legacies for their future; they’re building for their children, creating a new life with new opportunities. Watergardens Town Centre is continually evolving. The current activity centres on the old Coles space that previously had a solid wall at the perimeter of the centre. It’s being transformed with an active and vibrant face, a massive shopfront and entry to a brand-new market place, an abundance of fresh food, street food and casual eating. The leasing team are targeting operators with produce not available in the major supermarkets – European/Continental Deli, Asian, African and Indian produce that embraces tradition through the power of food bringing people together. Part of the QIC focus is on food because of the importance of food and family in this community; the research along these lines is thorough, producing comments from the leasing team such as: “Many of our customers want wholesale butchers as distinct from the normal high street operation; they want a ‘bespoke’ food operation, a real mixture of fresh and cooked foods, a collection of specialist purveyors from around the globe.” Melbourne is the ideal place to achieve this; across the city and at its heart are food operations as diverse as anywhere in the world, markets like South Melbourne have inspired the product mix they will bring to Watergardens. It’s a characteristic of Watergardens that they were always ‘well above the average’ when it came to the Fresh Food/ Food and Beverage component in the GLA. They plan a ‘collection of villages’ across the 56-hectare site; the natural waterway – Taylor’s Creek – that runs through the property has been landscaped and beautified; there will be a significant component of ‘green and public space’ and children’s play zones considered in the masterplan. Of course, the metamorphosis of the vision – the creation of the town centre – requires a close association with the authorities, local and state governments; the visions must be shared. At Watergardens Town Centre, QICGRE constructed the main street and in conjunction with the Authorities, moved and electrified the train station which has now been re-named “Watergardens”. Earlier this month, we reported in our weekly e-newsletter and on our website, the sale by QIC to Dexus, of 80 Collins Street, Melbourne. The sale received worldwide publicity in property circles for a number of reasons; for a start, the price was close to $1.5 billion. But enormous as that is, it’s just a number; 80 Collins Street is a lot more than a number. 80 Collins Street is a large-scale site – a precinct in fact – strategically located in the eastern core of the Melbourne CBD; its Collins Street frontage lies at the heart of what is commonly known as Melbourne’s ‘little Paris’. The iconic 80 Collins. A new dimension in commercial, retail and F&B, revitalising a languishing part of the Melbourne CBD The precinct comprises about 100,000m2 of Net Lettable Area across an existing 47 level A-grade office tower, a new 35 level premium office tower; a new retail podium with 21 tenancies and a new 255 room boutique hotel. Although the property is primarily a commercial office/hotel tower, we, in the shopping centre industry cannot fail to be impressed by the retail component; without exaggeration, it’s a leading edge, world-class project and QICGRE have pulled it off in spades! Pre-sale publicity described the retail as follows: “80 Collins will bring together the designers and tastemakers of the moment. From luxury to advanced contemporary fashion, this is the home of innovative flagships and the future of retail.” Pre-sale publicity it may well have been, but it’s unusual for the fact that it could be described as an understatement! The retail component is simply magnificent. 80 Collins – a landmark addition to the Melbourne CBD In overview terms, the retail comprises four distinct components. The first is the face along Collins Street, which incorporates a historical building; it’s the last remaining townhouse of a row of four similar three-storey houses built in 1855. From 1934 to 2009, the ground floor shop was occupied by the exclusive boutique ‘Le Louvre’, established by Lillian Wightman, a doyenne of the Melbourne fashion scene who introduced the latest Paris fashions to Melbourne. It was her who originally termed that section of Collins Street ‘the Paris end’. It was the shop for Melbourne elites from the 1950s through to the 1970s. More to the point, it was Lillian who saved the building from demolition, refusing to sell it to the developers of Nauru House in the ’70s. The second component includes two of the world’s most prestigious luxury houses currently not represented in the famed East end. Next comes the Exhibition Street frontage where previously there was no retail. It now will house the F&B operation Farmer’s Daughter, and others. And finally, there is the Little Collins Street component. QICGRE, instead of opting for the usual Food Court, went with a more complex yet market-oriented boutique F&B collection. They’re smart, distinctive, iconic, well-known and prestigious. 80 Collins – a landmark addition to the Melbourne CBD Offerings include Glacé from Punt Road, Melbourne, an iconic French styled dessert shop by Christy Tania, Axle coffee, Bowls Baby by Charlie Carrington, breakfast bowls, wholefood bowls and smoothies. There are cocktail bars, a wine bar, restaurants and cafés along an active laneway through to Collins Street. But the jewel in the crown anchoring the retail and F&B is a 2,500m2 multi restaurant concept by Melbourne icon restaurateur Chris Lucas and famed chef Martin Benn and front-of-house Vicky Wylde of the former Sepia Restaurant in Sydney (voted last year as the best restaurant in Australia). And yet again, the QICGRE team approached and developed 80 Collins, not as a twin towers and base retail project, but as the revitalisation of a major city precinct through a long-held vision and multiple land acquisitions. They saw it as a significant and historic part of the Melbourne CBD and approached it as a major part of the city, wanting to preserve its identity, its tradition, its future and its culture. From the peak of the ‘Le Louvre’ days in the ’70s, the precinct had declined in importance somewhat in relation to its being an integral part of the eastern CBD. QICGRE’s asset vision from the start of the project was quite clear, unambiguous and yet simple: “To create a visionary destination that amplifies the city’s culture and acts as a catalyst for reconnecting and revitalising the East end of the Melbourne CBD.” They’ve pulled it off, and as we said before, in spades. QICGRE has a large portfolio of some 27 properties across the country in addition to their office portfolio in Queensland and Canberra, which also encompasses two major office developments. There are 12 centres in Queensland including Hinkler Central in Bundaberg, Hyperdome and Grand Central in Brisbane. In Sydney, they own four centres including Westpoint and of course, Castle Towers. QICGRE also own the Canberra Centre and in Melbourne, as well as Watergardens, there’s Eastland, Pacific Epping, Pacific Werribee and several more. The Claremont Quarter in Perth is also one of their assets. QIC Global Real Estate also has 12 major properties in the US located in New York, Virginia, Pennsylvania, Florida, California, Nevada and Colorado.