Next stop, a bit of retail therapy
Southern Cross Station is to get a revamp, writes Philip Hopkins.
Southern Cross Station is to get a revamp, writes Philip Hopkins. A WOOLWORTHS supermarket will be the anchor tenant at Melbourne's Southern Cross railway station in a big revamp of the station's retail precinct.The number of shops at the station will be increased by a third in stage one of a $22 million refurbishment by the station's manager, Assetco Management. It is the first upgrade in six years.AssetCo is a specialist asset management company owned by Industry Funds Management, one of the largest Australian industry superannuation fund managers. It was created to manage public private partnership investments such as Southern Cross.Assetco's chief executive, Phillip Walker, said the station would have 48 shops, up from 28, and 41 tenants had already taken out leases.The retail space will expand by more than 40 per cent, from 4700 square metres to 6800 square metres.The revamp was prompted by Delaware North, the original controller of the retail tenants, pulling out. "They decided to reposition themselves, having bought other assets in Australia and the world," Mr Walker told BusinessDay.Assetco hired KPMG to do a study of the Southern Cross precinct to charter a course for redevelopment. This was completed late last year.One thing was clear: the dramatic rise in numbers using the station and the broader precinct's changing demographic had created a dynamic retail market.Mr Walker said the number of patrons passing through the station this year was expected to approach 40 million. Daily traffic volumes, only 55,000 in 2005, were more than 110,000 now, and rising. "There has also been a significant rise in VLine passengers, international visitors using Skybus to get to and from the airport, and buses from the country," he said.KPMG estimated there was a potential $4.6 billion retail spend per year in and around the station. A 500-metre radius of the station included many non-traveller customers more than 17,000 workers within one block and 3000 local residents within two blocks. Etihad Stadium also has more than 70 events annually.Mr Walker said the analysis meant the station had "captive" consumers. "But this does not mean we are complacent. We must have a good quality offering."Woolworths will take up the space previously set aside for the food court. Other key tenants in the refurbishment will be international newsagent WHSmith, which will have three sites a flagship Hungry Jack's store that will be more akin to a restaurant and a Loco bar on level 1 where the Virgin store used to be.Spotless will take seven sites that will include a Red Rooster and a Sumo Salad store. Individual tenants will include Pie Face and a Degani's coffee shop.Mr Walker said Assetco's policy was not to jeopardise the business of existing tenants. They would mostly relocate within the station.He said rents would include a turnover component. "The retail and business patronage will continue to climb. We expect ongoing growth in the precinct, including Docklands, and want to be exposed to that growth," Mr Walker said. Thus Assetco had accepted some lower base rents and a higher percentage exposure, "which makes sense".Mr Walker said he was also keen to attract a quality bar-restaurant to the station. Stage 2 would also probably have a medical centre and other service amenities. "A major influence on our plans has been European train stations such as those in Paris, St Pancras in London and Berlin," he said.