Westfield has announced a $50 million expansion of its Innaloo shopping centre in a move that will add 28 new specialty stores to the complex and step up competition with the neighbouring Action MegaCentre.
Frank . Lowy's shopping centre giant confirmed yesterday that construction of the redevelopment would begin this month with a view to completing the work in September next year.
A spokeswoman for Westfield said the redevelopment would add more than 7200sqm of retail space to the shopping centre, which boasts Coles, K mart and Target as its anchor tenants. The development won't change the basic configuration of the development, which is spread across one level.
Lease Equity director Jim Tsagalis 'Retail spending is very strong so it's a good time for retailers to make a strategic move.' said the expansion of the lnnaloo centre was likely to spark questions about the future of Action MegaCentre, owned by Centro MCS.
Market watchers have suggested Westfield might make a play for its neighbour in a bid to fulfil expansion plans and consolidate its operation. Action MegaCentre turns over $33.39 million a year and consists of an Action Supermarket, Crazy Clark's, 23 specialty stores and a
A spokesman from Centro said be did not expect the expansion to affect the Action complex. Innaloo is one of only two centres owned by Westfield in WA, with the other being Carousel.
Mr Tsagalis said the centre was ideally located on the tip of the western suburbs and just a stone's throw from some of the most densely populated inner northern suburbs. "I believe it's in a fantastic location on Scarborough Beach Road and it had the potential to be a super regional centre but it is also closely located to Karrinyup," Mr Tsagalis said.
"Innaloo is potentially much better located than Karrinyup but there are difficulties in coming up with something that functions optimally over one level."
The addition of new specialty shops will increase the mix of tenants and could introduce some new fashion brandS to the complex.
"It's likely the mix of tenants will be a more typically Westfield mix with quite a bit of fashion pitched at the middle market," Mr Tsagalis said.
CB Richard Ellis' Andrew Woodley-Page said the expansion was not unexpected given that consumer spending was running at record levels.
"Retail spending is very strong so it's a good time for retailers to make a strategic move rather than lose market share to their competitors," Mr Woodley-Page said.
"With the addition of specialty stores, Westfield will be looking to capture shoppers from the local population who may be travelling to the closest regional centre."
Research by CB Richard Ellis reveals that of all the direct property markets in Australia, the retail sector has outperformed both office and industrial over the long term.
Colliers International's David Cresp said an expansion of the centre had been on the board for a few years.
"WA shopping centres have continued to perform well and purchase opportunities are keenly sought after," he said.