David Jones head of property, Cristie Gordon, recently flew to New Zealand to brief the property sector on the chain’s strategy for Wellington as well as its future needs in the marketplace. First Retail Group’s Chris Wilkinson was at the briefing, along with analysts from his company. “David Jones’ openness and candidness impressed me as the department store group looks to understand NZ consumers – and long term potential,” he remarked. “What came to th
e fore is that in the face of the tough time Australia is having economically, David Jones has taken a shine to the stability of Wellington’s market that has eluded peaks and troughs and grown its retail sector.”
He explained that as a new entrant into NZ’s market David Jones wants to err on the side of caution and it sees Wellington as a fit “as it has not endured the vagaries of other markets”.
Wilkinson emphasised that David Jones reiterated that it had been impressed with the extent to which Wellington has fostered close relations with it and collaborated with it in the building of a case for its entrenchment in the capital city.
“Woolworths South Africa has been behind David Jones’ interest in NZ,” he pointed out.
“Woolworths SA has provided David Jones with the capital as well as the confidence, enthusiasm and courage to take on new markets!”
In the NZ Herald yesterday, reporter Anne Gibson wrote that retail experts Paul Keane and John Polkinghorne of Parnell-based consultants, RCG, predicted David Jones might consider the possibility of opening in Auckland after its Wellington move.
“But in June, David Jones CEO Ian Nairn said the company was not planning on expanding beyond Wellington within the next few years,” she wrote.
She added that Polkinghorne said one possibility for David Jones in Auckland was leasing ground and upper level space in Precinct Properties’ vast new 38-level Downtown tower, planned for the Lower Albert St/Quay St/Lower Queen St block.
But Precinct CEO Scott Pritchard is not saying which tenants the business is talking to – only that retail rents could top $4000 per sqm, making them by far NZ’s most expensive.
“Keane is certain David Jones is eyeing Auckland, despite the Australian retailer rejecting speculation so far,” wrote Gibson.
Keane wrote in RCG’s regular retail update, “What next in NZ for David Jones? Regardless of comments from the executive, it is very apparent that the company will have eyed up Auckland as a next step. Property owners in Auckland who have the vision and the space availability in the right location will be licking their lips at the possibility of acquiring this key brand. A long lease with a quality international brand can add volumes to any lease and building valuation. Further, David Jones will want exposure to NZ’s major city with a large population.”
Polkinghorne, RCG’s economist, backed that up.
“We expect David Jones to come to Auckland due to the population. I think they would love to have a CBD location if they can find one. Their stores in Australia are CBD but they might look at areas like Sylvia Park,” Polkinghorne said, adding that was headed to becoming NZ’s first super-regional shopping centre, so big and forceful that it could draw major new international brands.
Polkinghorne said Precinct’s Downtown was extremely suitable for David Jones “subject to rents”.
Wilkinson concluded by stating, “Auckland will definitely be on David Jone’s radar. Imminent development of key central city sites, along with potential space availability in high profile, demographically suitable suburbs close to the CBD will provide the company with a range of options over the next few years.”
Nerine Zoio: nerine@insideretail.co.nz