CBD luxury retail has been the quiet achiever of the past two years.
Despite the interruptions to overseas and domestic travel, luxury spending by Australian residents rose by 21 per cent for the year to March 2022, compared to March 2021, holding up the mirror to the value and strength of the domestic customer.
More businesses are making their way to our shores and investing in expanding and optimising their physical store networks.
Customer demand for world-class luxury retail experiences has never been more aligned to the appetite we’re seeing from brands to increase their presence and engage with our customers.
For many of these brands, Australia and New Zealand presents a key opportunity for growth.
Brands once placed emphasis on the inbound stream of overseas visitors. Now, this is just the icing on the cake and where we’ll start to see this growth accelerate as international travel takes pace.
The rise of luxury retail flagships
Westfield Living Centres are the destination of choice for customers.
We are successful at driving visitation in our strategic locations, which is why businesses want to maintain and grow their store networks with us so they can connect and engage with more customers.
Our Living Centres are located in the heart of communities, close to where majority of the population live. In 2021, we had 413 million customer visits and annual sales through our platform were $22.1 billion despite the extended lockdowns in NSW, Victoria, ACT and Auckland.
We’re seeing customer visits continue to grow across our portfolio and we are confident in the role our Living Centres play in attracting visitation to CBD areas.
Our approach to the customer is based on the insight that we compete for their time and attention. Listening and responding to feedback is how we curate retail experiences that meets their interests and needs.
It’s also how we deliver on Our Purpose, Our Plan and Our Ambition to grow by becoming essential to people, communities and the businesses that interact with them.
Over the past 2 years, our luxury retail portfolio has grown exponentially, now made up of 76 stores, representing 22 brands across Australia and New Zealand.
When restrictions eased in New Zealand last year, we launched a new luxury precinct featuring 12 new stores, from Louis Vuitton, Gucci, Moncler, Balenciaga to Alexander McQueen, Burberry and more.
Many of these brands are first to market, with Westfield Newmarket expected to be their only representation in the country.
The response from the Auckland and broader New Zealand customer has been significant and it’s pleasing to see other brands taking notice. Versace and others will arrive later this year.
At Westfield Sydney, we’ve introduced an ensemble of leading brands, including luxury watch and fine jewellery retailer Piaget, Jimmy Choo and Versace will open imminently. We are also fielding demand from many other brands looking to enter the Australian market.
The access and ability to form connections with our customers has also motivated our existing brand partners to start thinking differently.
Brands are responding to the demand we’re seeing for luxury experiences in our suburban Living Centres, including in New South Wales and Western Australia.
They’re also investing heavily in rightsizing and refurbishing their existing flagship stores to bring the latest concepts and formats from around the globe, to Australia and New Zealand.
Not long-ago customers would travel overseas to purchase a current season product. Now our partners see the value in expanding their store footprints so they can deliver the same, elevated experiences and ultimately house more product.
The transformation of Gucci at Westfield Sydney is a good example of this. We supported the expansion of its flagship store from a single level to a 1,000 sqm two-level boutique featuring ‘bespoke client zones’ for exclusive shopping experiences.
We’ve also supported Bottega Veneta, Balenciaga and Chanel with their own optimisation strategies, with works at Celine already underway and Fendi to commence early next year.
Westfield Sydney at the heart of the CBD luxury precinct evolution
Looking more broadly at the Sydney CBD luxury experience it’s hard not to notice the evolution of the precinct and the significant role Westfield Sydney plays in that.
Just like Canton Road in Hong Kong and the Miami Designer District, Westfield Sydney is considered a world-class luxury retail destination in its own right - best known for its diverse apparel, shoes and accessories offer.
No other location in the Sydney CBD offers the extensive mix of luxury brands and experiences that Westfield Sydney delivers.
As more office workers and visitors return to the CBD and with greater focus from government, industry and the private sector to revitalise the broader precinct, we’re feeling very optimistic about the long-term future of the CBD.
Customers are enjoying being back in our centres and we’re also seeing a growing appetite for physical retail experiences. We expect this to continue.
Together with our joint venture partner Cbus Property, we are investing in the redevelopment of 101 Castlereagh Street, which includes the expansion of Westfield Sydney – taking the centre from two to three interconnected buildings.
The investment will enable us to create the next horizon of our flagship Living Centre. It will become a destination thriving off the 24-hr economy, where retail, residential and commercial combine.
We’re looking forward to taking our customers, community, and business partners on the journey with us.
As seen in 2022 Shopping Centre News CBD Guns issue