Subi resurgence will take time to spread

Apr 29th, 2015

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Article by:
Marissa Lague

Gerald Moscarda

Subiaco is going through a mini-development boom but retailers outside the train station precinct could continue to struggle, according to industry commentators.

Windsor Knight director Greg Pearce told an Australian Property Industry forum that about $600 million of development was on the books, but only property owners prepared to adapt would survive as the neighbourhood changed.

The company is embarking on a $96 million revamp of the old Station Street Markets, with the site due to be transformed into a four level retail and office development including a 6000sqm Target.

“In a fast-changing growth period it is the people and businesses that best adapt to change that survive,” he told 100 property professionals and small business guests. 

“Everyone laments change but it is really nothing more than we should expect.”

Mr Pearce said many Subiaco retailers had experienced poor trading - exacerbated by declining foot traffic and high rents - but there was demand that could be met. Landlords who overcharged or did nothing to encourage new business for the area were making a mistake.

Lease Equity managing director Jim Tsagalis said Subiaco was still a strong location for retailers but it had seen its influence decline as a retail precinct.

"Rokeby Road was once considered the prime high street in Perth and where it sat in the hierarchy was very strong," he said. "Over time its position has been eroded, particularly against commonly owned shopping centres that are less disparate."

Although international retailers such as Zara, H&M and TopShop preferred large-scale development in shopping centres, Subiaco could compete by chasing quick service food and beverage operators and destination businesses, Mr Tsagalis said, but warned high rents remained a deterrent.

"There will need to be a recalibration of rent almost certainly, and I hope that doesn't damage people's investments in the longer term, but in the shorter term that is just the cost of doing business," he said.

Despite the potential for redevelopment, concern remains about the impact on Subiaco of losing football to the new Perth Stadium at Burswood in 2018.

WA Football Commission director strategic facilities and development Geoff Glass said the group was still weighing its options for Subiaco Oval - a decision complicated by the relatively young age of the main structure. Options include the commission selling its interest in the site to the State Government or the City of Subiaco, entering a joint venture with the Government to develop the site, or seeking to acquire freehold title to the site, which is owned by the City of Subiaco but leased to the commission until 2090.

Mr Glass said the economic impact of the oval went beyond the 24 AFL games played on the ground each year, with about 250 people working full-time on site plus the flood of people attending concerts and other special events.

The forum was told the focus of new development remained concentrated around the train station, extending down Hay Street with the proposed redevelopment of Ace Cinemas into a hotel and entertainment complex. That could prolong the pain on Rokeby Road, with retailers complaining that soaring rents and declining foot traffic make it difficult to trade. 

Mr Pearce said despite a tough retail leasing market, he had made substantial progress towards leasing his Station Street development.


Source: The West Australian, 29th April 2015

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