21 September 2016
by Nicole Lindsay
Australia's Biggest Shopping Mall Gets Even BiggerView from the top: A new food court at ground level is part of the latest expansion of Chadstone.
Plans for further expansion are under way for Chadstone Shopping Centre, even as it unveils its new $660 million wing, anchored by a soaring 31-metre-high atrium under a dramatically curved 1000 tonnes gridshell roof.
It's the fortieth stage in the shopping centre's evolution since the Gandel Group bought the centre in 1983 when it was already 23 years old.
No longer just a shopping centre, Chadstone is becoming its own city, with office buildings and a hotel ready to emerge on the horizon. It will maintain its position as one of the biggest shopping centres in the southern hemisphere at a time when all the big centres are growing larger.
Vicinity boss Angus McNaughton revealed the company has another four or five stages in planning for the centre, which is about to tip the scales at more than 210,000 square metres, 10,000 car parks, a value of $5 billion and a yield of 6 per cent.
Vicinity, which half-owns the East Malvern centre with retail magnate John Gandel, opens the vast new wing, boasting two-level stores for Uniqlo, H&M and Sephora, a restaurant terrace and a 13-screen Hoyts multiplex, on October 13.
The second stage of the 46,000-square-metre expansion, featuring the Legoland Discovery Centre and international luxury retailers Valentino, Celine and Loewe, will open in the middle of 2017.
Mr McNaughton saw no end to the potential growth for Chadstone, driven by its central position in Melbourne's south-east suburbs, and rejected any possibility of cannibalising the available consumer spend from other centres or existing retailers within the centre.
"The productivity of the centre is very high. If the pie was the same there might be some cannibalisation, but the pie is growing. It might flatten off when a new centre opens but then it starts growing again," he said.
Chadstone already has more than 20 million domestic and international visitors a year and another 500,000 to 1 million people are expected to live in its massive catchment area by 2050.
Far from spreading the centre thin, growth would give people multiple reasons for visiting the centre: from the supermarkets, to fashion, restaurants, the movies and Legoland, which would help alleviate any guilt parents might have about taking their children to a shopping centre on the weekend, Mr McNaughton said.
But despite the city-size scope of the centre, he talked down the prospect of anyone actually living at Chadstone, even though apartments were first mooted for this stage.
"If you have apartment towers full of titled units then that creates a complexity about the continued growth of the centre."
Construction will start soon on a hotel, pitched at the region's 100,000 business visitors. A podium and all the infrastructure have already been built next to the new 17,000-square-metre office tower. That tower is 90 per cent leased, with only one floor out of 10 remaining vacant, he said.
Mr McNaughton said he was very happy with the progress of Vicinity's asset sale program, which has so far reaped $1.4 billion out of a total $1.5 billion worth of property deemed superfluous to the listed entity's core business.
Last week, Vicinity sold its half-stake in the Tuggeranong Hyperdome to its joint-venture partner, Bob Ell's Leda Group, for a bargain $120 million, $20 million less than its book value.