Kiwi Property has given the green light to expand Sylvia Park today. The $223 million retail expansion will focus on the 'Galleria', and includes a new two-story 8,100 sqm flagship Farmers department store. The Galleria will also include new international brands and concept stores and will highlight selected retailers from Sylvia Park's current waiting list of specialty tenants.
The 60 new retailers will span across 18,000 sqm of retail space to the centre including a new generation of cafés, and multi-deck carpark with 900 carparks with direct access to the Galleria. This boosts the total carpark capacity to around 5,000.
As New Zealand's largest shopping centre, on completion of the expansion, the new and improved Sylvia Park will total over 90,000 sqm. The projected value of Sylvia Park (upon completion) has been assessed by independent valuer CBRE at $1.12 billion.
“Our vision for Sylvia Park is the creation of a world-class town centre offering our customers exceptional retail, dining, entertainment and workplace experiences. This latest retail expansion will consolidate the centre’s position as New Zealand’s favourite shopping destination,” said Mark Ford, Kiwi Property Board Chair.
Sylvia Park has been a success since they first opened their doors in 2006. "Since the 2009 financial year, annual retail sales at the centre have grown by over $185 million to $547 million and our net income has grown by more than $14 million to $41 million per annum," explained Chris Gudgeon, chief executive. "By bringing the right stores and operators to Sylvia Park, we have created a highly productive retail environment. Our retailers have seen customer numbers grow to more than 14 million visitors every year, with specialty sales productivity increasing from $7,200 per sqm in 2009 to current levels greater than $12,400 per sqm.”
Gudgeon added that construction cost certainty had been secured by working through an early contractor involvement process with its builder, Naylor Love. "By working collaboratively through critical design, planning and programming elements we have been able to negotiate a fixed price lump sum contract."
In addition to the Galleria expansion, other general remedial works will be carried out that will cost around $11 million. The construction programme will commence in March 2018 with completion expected in mid-2020.
The project will be debt funded from existing facilities and is expected to provide an initial net incremental income yield on capital expenditure of 5.7 percent, growing to 6.2 percent by year three and an incremental internal rate of return in excess of 10 percent.
"We have built up considerable momentum in the delivery of our world-class town centre vision at Sylvia Park. Since opening New Zealand’s first H&M and Zara stores in October 2016 we successfully opened The Grove dining district in December 2017, featuring an expanded range of contemporary dining experiences. By mid-2018 we expect to successfully complete construction of our new $80.2 million, 10-level office building on the site and by the end of this year we will complete our new $36.3 million five-level, central carpark building," added Gudgeon. "We are positioning the centre for the future by constantly evolving our retail mix in response to consumer preferences, focussing on high performing stores and in-demand retailers."
"From the moment we announced our intention to expand Sylvia Park, we have enjoyed strong tenant enquiry from high-quality local retail brands, as well as in-demand international retailers, some of whom, if secured, would be new to the New Zealand market," said Aubrey Cheng, Retail Leasing for Kiwi Property manager. "We remain encouraged by this strong level of tenant enquiry and look forward to bringing further excitement to New Zealand’s favourite shopping centre."