Stockland is turbocharging its apartment business with the development of suburban apartments on land it owns next to its centre at Merrylands, Sydney, to generate affordable city living in a mixed use environment.
The group has lodged a development application for about 500 apartments.
It will also pursue a similar-sized project at Toowong in Brisbane, to connect residential with the shopping centre.
These projects will follow the existing sites at Balgowlah and Cammeray in Sydney and Tooronga in Melbourne. Stockland chief executive Mark Steinert said it was always the group's intention to revisit the suburban mixed use developments, "now it's moved to implementation".
He said while it was a long process, the medium density strategy was gaining traction. The idea was to add residential to the retail mix.
Stockland's chief executive of commercial, John Schroder, said the retail sector was resurgent and it made sense to connect residential with retail and also to offer homes where people could have access to a range of amenities.
The mix of tenants in malls was also changing to reflect the demand of customers.
"There is an evolution in Australia's demographics. If you consider Merrylands, for example, the mix of shops in Merrylands is not homogenous. It is very reflective of the over 65 nations of the world that we service in that primary and secondary trade area," Mr Schroder said.
"So the days of shopping centre retail mix as being homogenous is gone."
He said the Balgowlah mixed use site was very different from Merrylands, yet they were both in Sydney.
Mr Steinert said the composition of the mixed use sites would reflect the demographics of the surrounding district and consumer catchment.
Despite the low interest rates, which indicate a sluggish economy, the retail sector is the standout in the current reporting season.
While department store sales remain slow, mall owners are reaping the benefits of the booming housing market, which has resulted in consumers buying new furnishings and appliances – from coffee makers to upmarket pots and pans.
According to the Stockland numbers, specialty store sales rose by 8.1 per cent, boosted by technology, while the so-called mini major stores, such as Priceline, and blockbuster movies had sales rises of 10.8 per cent.
Mr Schroder said there was a resurgence in department stores and discount department stores, with sales growing 1.9 per cent for the half, and the pace was picking up, with 2.1 per cent growth in the December quarter.
"Apparel sales moving annual total sales (MAT) per square metre also improved, growing 5 per cent during the year, a direct reflection of remixing to more productive fashion retailers," he said.
"In the retail projects pipeline, the second stage of the $228 million redevelopment and expansion of Stockland Wetherill Park in western Sydney officially opened on December 10, three months ahead of schedule."
Indicating how well its performing, Mirvac's chief executive Susan LLoyd-Hurwitz, led the results briefing on Thursday on the retail business, which has undergone a lot of transformation. Mirvac's retail division is run by industry stalwart Susan MacDonald.
"We now have $3.2 billion of assets under management, so not only has the portfolio increased by over 50 per cent over the past three years, it has been significantly improved by our targeted urban strategy," Ms Lloyd-Hurwitz said.
"The quality of the retail portfolio has been transformed, driven by our targeted urban strategy. The strong sales performance achieved demonstrates the benefit of our strategy to be overweight in metropolitan Sydney and resilient markets, and we expect our retail assets in these areas to continue to outperform."
