Slowdown, what slowdown? Retailers snap up mall space

Westfield's mall will occupy the circular area in this aerial view of Albany's town centre.

Even as builders begin work on a new mega-mall on Auckland's North Shore, shops are already vying to lease premises there, in a sign of ongoing demand for retail space despite predictions of a slowdown in consumer spending.

Six major tenants have been announced as the anchors behind the $200 million Albany mall, which Westfield is aiming to open by next Christmas.

Justin Lynch, deputy director of Westfield New Zealand, said New World, Kmart, Farmers and SkyCity Cinemas had leased large-format areas, and Borders Books and Cafe and No 1 Shoe Warehouse would also take space.

Although Sylvia Park has just opened Warehouse Extra and Foodtown stores and new fashion shops, and Newmarket has expanded along Nuffield St, retailers see unsatisfied demand for more malls.

In January, earthworks started on the Albany site. Lynch said builders started work late last month and the mall would be opened in two stages in September and November next year.

Shamubeel Eaqub, economist at Goldman Sachs JBWere, said he was not surprised at Westfield's leasing moves because the business took a longer-term view of the economy than the next year to 16 months, when conditions were forecast to weaken.

"Their outlook will be underpinned by population growth and the fact that New Zealand is still a reasonably wealthy country," he said.

But Robin Clements of UBS wondered whether Auckland faced becoming over-shopped, saying this was a risk mall developers took, particularly with a less robust economic outlook.

Joe Moodabe, chief executive of SkyCity Cinemas, said the new 10-screen Albany complex would include Gold Class auditoriums and lounges.