How the rich invest: Retail still booming for Vitocco

While he is acutely aware of the issues the global pandemic has created, Vitocco says it took about a week for the centre’s management to be informed by NSW health authorities that one person who has been diagnosed with the coronavirus had attended the shopping centre on June 6.

Deep cleans of the centre were undertaken and Vitocco says all the appropriate government policies have been followed.

But he insists neither the recent scare nor the wider shutdowns earlier this year have had a long-lasting effect on Narellan, which was started on a five acre parcel of land Vitocco and Perich bought for about $1 million back in 1989.

“It has not affected us much at all. The centre is back to about 98% of our visitor numbers pre-COVID. We had a very strong June and a strong first half of July.

“I go to the Sydney CBD quite a lot lately and it is a lot quieter there. It is like a ghost town, by comparison. Western Sydney is going quite well.”

Narellan has become a powerhouse in retail terms, spanning 71,800sqm in what is a booming region of southwest Sydney. It measures one kilometre from one end to the other, all on the one grade, and attracted about 11 million shoppers last year. It had a moving average turnover of more than $500 million.

The centre is one of the top 10 best performers of its size in the country and one of the biggest still in family hands, rather than being owned by institutions or ASX-listed property vehicles.

More than $400m has been spent on it since inception and there is still room for it to grow to above 100,000sqm of lettable area in the future.

It is no secret that trading conditions have been tough for many retailers, but Vitocco insists Narellan is holding up relatively well. “The supermarkets have obviously done well and have been trading about 25 per cent above average. In terms of closures you’ve seen some like Mosaic Brands. But they have been decisions made on a national level, not at a Narellan level.”

Vitocco is also a retailer in his own right, having rescued the Max Brenner chocolate franchise from receivership in 2018.

While trading has been recovering across many of its outlets, the pandemic has hit that business. Vitocco reveals that Max Brenner had opened a new store in Melbourne’s Broadmeadows only about a week before the city was locked again earlier this month. But on the positive side, he has spent $500,000 on a new store at Brisbane’s Southbank, and also has plans to open five stores in shopping malls across the country.

Vitocco is also a residential property developer, and he says western Sydney has been revitalised since the federal government announced grants to encourage new home builds in early June.

“We’ve had 81 lots sold in three weeks alone at our Gregory Hills development,” Vitocco says.

“About 70 per cent of the sales are first-home buyers and we’ve been selling at about $380,000-$400,000 per lot, and then you’re spending about $300,000-$350,000 on buying a house on that.”

Gregory Hills and Emerald Hills represent about 4000 lots in total that Vitocco’s development business have either sold or plan to sale on land that also include retail and commercial projects in Sydney’s southwest.

The region has been given a big boost by recent confirmation of a rail line that will link Narellan to the new airport being built at Badgerys Creek and residential and commercial precincts in between — a good portion of which is owned by either the Perich or Vitocco families. The rail link will also include a new station planned to be near the Narellan Town Centre.

“It gives us some certainty for a region that is growing very quickly and has a big future,” says Vitocco. “The airport will be a game-changer for the west.”

This article originally appeared on www.theaustralian.com.au/property.