This article by Ben Finger, Managing Director – Haben, forms part of SCN’s annual CEO Outlook feature published in Big Guns 2024. Premium members can view the full digital magazine here.
Having a long family history in property development and exposure to all property sectors, we made a conscious decision to be a retail specialist when we established the business in 2009. Many contributing factors that led to this decision, including the resilient income streams, opportunity to unlock embedded value from attractive zoning and the engagement with community. However, it was an agreement for lease that we entered with Woolworths in a new development, and the following lengthy Land and Environment Court case to obtain approval, that gave us real conviction to focus on the retail sector. Australia’s tight planning controls, and the difficulty to replicate assets, gave us the confidence to invest significantly in the retail sector and invite capital partners as co-investors. The Haben portfolio consists of 12 assets along the Eastern Seaboard, representing in excess of $2 billion in funds under management. The outlook remains buoyant as we continue to see long term value in the sector and our ability to deliver consistent capital growth and income returns. 2024 will see us continue to expand our fully integrated funds and asset management business, ensuring our tenants, customers and investors benefit from our integrated business model.
Driving success
Stakeholder expectations have changed dramatically during the past 15 years of our business. We have seen the evolution of omnichannel retailing, introduction of social media, the power of data analytics, automation and AI, the maturity of ESG reporting and the COVID-19 pandemic. We have participated in the evolution of mixed-use development and in the creation of ‘retail-living’ spaces.
Delivering for customers
Success in this ever-evolving retail landscape, requires partnership optimisation, which means understanding retailer and customer drivers and adapting centres to meet these needs. This year, there will be continued focus on meeting customer retailing demands by:
- Improving supply chain and accommodating last-mile logistics to fulfil innovative retail strategies and maximise sales and service.
- The reconfiguration of car parks for ‘Direct to Boot’, ‘Click & Collect’ and provision of postal and storage lockers to complement the bricks-and-mortar offer.
- Introducing or expanding electric car facilities to accommodate fast charging.
In addition, Haben will focus on understanding the needs of our customers, especially during these tough times, to deliver them exceptional experiences that set us apart from our competitors, increasing satisfaction, loyalty and market share.
Wollongong Central
Omnichannel
If COVID taught us anything, it was the affirmation that omnichannel retailing is important and the value of bricks-and-mortar is paramount. While it appears online as a proportion of total retail spend has plateaued at circa 14%* of total sales, bricks-and-mortar has been a driving force behind the positive leasing spreads across our centres and the broader industry, so whether it’s Showrooming or Webrooming the fact remains, success lies in a customer’s seamless transition between the two, to make them one.
ESG
Sustainability will remain a key focus throughout 2024 for all industry participants. The thematic of responsible investment is driving decision-making and financial performance, and we are investing heavily in people, society and the environment. Our people come from varied backgrounds, provide diversity of thought and experience and are encouraged to actively participate in external industry associations and community activities. Our team is heavily involved in the Property Council of Australia, Property Funds Association of Australia and Shopping Centre Council of Australia, representing Haben and bringing valuable learning and leadership to the business. Our marketing teams proactively engage with our centre communities, providing senior and school holiday programs and cultural events tailored to days of significance, such as NAIDOC, Diwali and Lunar New Year. Our centres are assessed and rated for energy and water efficiency to ensure continuous improvement on our consumption with the assistance of smart metering. The roll out of our solar strategy will continue this year and governance remains an important focus as we strengthen our internal systems and controls.
Casey Central
Focus on growth
Despite the cost of living pressures, we continue to record strong MAT and foot traffic across our portfolio. This is in part attributable to the non-discretionary nature of Haben’s centres as well as their demographic resilience (strong Boomer population). While the sharp rise in inflation and interest rates has and will continue to demand attention and focus to drive income growth and capital returns for investors and capital partners, the forecasted easing of these pressures should be positive for household purchasing power.
Community engagement
Repositioning assets remains a key focus for Haben, to improve the resilience of income streams by strengthening retail offers to meet customer needs and increasing the weighting of non-discretionary tenants. We expect to see a continued shift towards tenancies offering food, services, education and health. Creating a sense of place and fostering local connection is also key and is intrinsically linked with our purpose to improve experiences beyond expectation in the locations in which we reside. We’re proud to work with local artists in the communities where our centres are located to create statement murals and artworks as well as wallpapers and soft furnishings to establish unique links to local history. We acknowledge the important role we play in raising the awareness, knowledge and skills of our communities by embracing the melting pot of cultures we are fortunate enough to enjoy and celebrating the milestones. We recently celebrated a customers’ 100th birthday at Caloundra Shopping Centre, the place he walks to meet friends daily. These types of ambience upgrades and repositioning strategies aim to secure an assets long term position within its local community.
Cleveland Central
Housing and mixed-use integration
We anticipate the first half of this year will include calls for action in relation to housing affordability, key worker accommodation and the government’s proposal to improve housing outcomes for Australians. The opening of the first round of the Housing Australia Futures Fund and National Housing Accord and the suite of incentives being offered by State Governments for private developers to deliver housing, creates an opportunity for land rich shopping centres to consider the evolution of their assets and development of mixed-use precincts. The opportunity to reimagine shopping destinations as true shopping and living destinations is now upon us. Shopping centres are the essential hubs in local communities and offer important social spaces, employment opportunities and proximity to infrastructure that can help solve Australia’s housing crisis. Haben has plans for mixed-use integration across our portfolio and a large residential development pipeline. We plan to unlock the embedded value for both social, community and capital gain, securing each asset’s long term proposition.
So, as we embrace the year ahead, I must equally reflect on the year that was. I am immensely proud of the Haben team and what we achieved last year. Our hands-on management and repositioning strategies have remained a business focus. We have continued to evolve our centres, acquire assets with attractive returns and provide investors with income and opportunities for capital growth. Being awarded Unlisted Fund Manager of the Year for our Townsville Shopping Centre Trust by Core Property Research for the second year running, was a highlight for the business.
We look forward to this coming year with excitement and enthusiasm and a continued focus on achieving great outcomes for our centres and investor returns.
*ABS Nov 2023 online retailing
