Westfield Sydney among country’s most expensive shopping centre, average rent per square metre over $2,900

Westfield Sydney is now the company’s most expensive shopping centre in Australia and one of the priciest in the country, according to a new analysis conducted by research firm Leasing Information Services.

The figures show average base rent is set at $2,915 per square metre for the 145 registered leases in stage one, excluding ATMs, with three retailers paying above $2 million per year in total. These figures don’t include any other incentives.

Coffee boutique Nespresso, and fashion chains Guess and Esprit are paying over $2 million each year in rent, Leasing Information Services managing director Simon Fonteyn claims. Altogether nine companies will pay over $1 million in rent per year.

Fonteyn says the amount of rent being paid suggests these companies are using Westfield Sydney as their flagship stores.

“I would say these deals indicate a premium for these stores, and they’ve obviously chosen Westfield Sydney to set up their flagship locations.”

“Westfield Sydney is their flagship centre for Australia, and possibly southeast Asia, so they want to make a statement that this is the best centre, and they want to attract the best tenants.”

Jewellery stores are paying the most out of any category, with rent set at an average base of $7,000 per square metre, followed by homewares at about $5,200 per square metre and beauty/health at $3,200 per square metre.

Food is the cheapest category, with average rent per square metre at about $1,900, but Fonteyn notes this figure is skewed because of the Sky Phoenix Restaurant deal.

Fonteyn says some of the stores are paying “enormous” amounts of rent. Nespresso is paying over $2 million per year, while the highest rate per square metre goes to watch chain Tag, paying $11,000.

The shoe chain Wanted is paying over $1 million for a 100 square metre store, Fonteyn says, as it has frontage on Pitt Street.

But some chains have been able to snag a deal. Clothing chain Gap was able to snag a fairly large store for approximately $2,150 per metre.

Fonteyn says while the rents are high, they can be expected given how Westfield is approaching this centre as a premium destination, coupled with its locatoin on Pitt Street Mall.

The distribution of shop areas trended towards smaller shopfronts – 52% of the stores in stage one are between 51-150 square metres, and 35% are between 10-60 square metres.

“That’s to be expected. Firstly, because the trend in this area is suggesting stores are moving to smaller sizes, and secondly, because this is a city-based centre. You would expect there to be a higher proportion of smaller shops.”

“But the higher proportion of small shops has been happening for quite awhile. There is high demand for these types of shops, particularly kiosks and small inline stores, so Westfield doesn’t have any trouble filling them.”