Chadstone

Shoppers are heading back into malls, but not at the same rate as before the coronavirus struck and smaller convenience-style shops are beating out larger regional centres that were traditionally at the top of the property tree.

The shopping centre industry believes it can come through its current rough patch with investors backing the $1.4bn equity raising by Vicinity Centres amid concerns there is more pain ahead for shopping centre landlords.

Shopping centre landlords face a steep fall in rents of about 20% when the Morrison government’s stimulus package ends later this year, according to Morgan Stanley analysts.

The international spread of the coronavirus is the latest challenge to hit the ailing mall sector, ­already dealing with a series of retail chain collapses, an extended drought and the impact of bushfires along the eastern seaboard.

Vicinity Centres chief operating officer Peter Huddle has one of the biggest tasks in Australian retail property. He is responsible for driving the performance of some of the best luxury malls in the country — including Sydney’s much-loved QVB and Melbourne’s landmark Chadstone — while also turning around some of Vicinity’s less glamorous properties.

Melbourne’s Chadstone shopping centre, co-owned by billionaire John Gandel and the listed Vicinity Centres, is set for a makeover with its owners submitting plans for development worth more than $600 million.

Shopping centre giant Vicinity Centres has flagged yet another expansion of Melbourne’s massive Chadstone Shopping Centre, that it owns with billionaire John Gandel, with another tower and even residential apartments potentially in the mix.

Retail landlord Vicinity Centres is promoting itself as a luxury fightback story even though retail sales are yet to get a bounce from tax stimulus, interest cuts and a lift in house prices.

Billionaire John Gandel and co-owners of the listed Vicinity Centres are readying to again expand Melbourne’s famed Chadstone shopping centre as confidence at the luxury end of the market lifts.