Retail leasing DiRection 2015/16aRticulating a vision foR Retail in the Rocks

contents

1 Custodianship 2

About The Rocks

2 The Rocks Leasing Plan 4

Retail Leasing Direction

3 Key trends in retail 6

4 An enviable visitor profile 8

5 Retail zones 10

6 Preferred retail mix 12

7 Progressing the Leasing Direction 18

8 Contact 20

Retail Leasing Direction 2015/16 (As at 23/6/16) 1

1

2 Retail Leasing Direction 2015/16 (As at 23/6/16)

As a Government agency, Property NSW works to ensure the activation and profitability of The Rocks for the mutual benefit of tenants, visitors and the taxpayers of NSW.

custoDianshiPProperty NSW manages the assets of Sydney Harbour Foreshore Authority (SHFA), which was established under the Sydney Harbour Foreshore Authority Act 1998. SHFA is the landowner of The Rocks, working as part of Property NSW, in the role the custodian of the precinct.

Its main roles are:• place management

• heritage conservation

• urban renewal

• custodianship of NSW’s most state significant harbour foreshore areas.

SHFA through Property NSW, manages commercial and retail leases, and provides security, cleaning, building maintenance and other asset management services. It manages and curates two key heritage and cultural precincts – The Rocks/Circular Quay and Darling Harbour – which together attract over 41 million visitors annually.

SHFA through PNSW contributes $1.2 billion gross value added to the NSW visitor economy. Its corporate vision is to create extraordinary places in Sydney that the world talks about.

aBout the Rocks The Rocks is an iconic location, situated between the two most recognisable symbols of Australia: Sydney Harbour Bridge and Sydney Opera House.

The Rocks precinct:

• is 26 hectares of premium real estate

• has prime access to the CBD and all modes of transport

• adjoins Sydney Harbour

• is home to much loved cultural institutions.

More than 14 million people visit The Rocks each year and the precinct contributes $400 million per year to the NSW visitor economy.

As well as being Australia’s most significant historic precinct, The Rocks is a vibrant and contemporary space, well placed for future growth.

As a NSW Government agency, Property NSW works through SHFA to ensure the activation and profitability of The Rocks for the mutual benefit of tenants, visitors and the taxpayers of NSW.

Retail Leasing Direction 2015/16 (As at 23/6/16) 3

2

4 Retail Leasing Direction 2015/16 (As at 23/6/16)

Retail leasing DiRectionSHFA’s vision is to make The Rocks one of the most envied heritage destinations in the world – an alluring precinct and a leader in retail experience internationally.

To achieve this, The Rocks welcomes businesses:

• with passion and style, who understand the market, care for the environment and look to the future

• who embrace the best of Australian retail innovation

• who offer excellent personalised customer service

• who deliver truly amazing retail experiences

• who educate, entertain and enrich the retail experience

• with a unique product that captures the consumer’s imagination

• that add to the overall success of The Rocks

• that are vibrant and fit with the preferred retail mix for The Rocks.

A number of The Rocks’ tenants who offer unique retail experiences

1 Creperie Suzette 2 Barber Supreme3 Sake Restaurant4 Joe Bananas5 The Rocks Brewing Company

the Rocks leasing PlanThe Rocks Leasing Plan consists of a series of documents that guide and inform SHFA’s leasing and property management decisions.

The key documents can be found on SHFA’s website and consist of:

• Strategic Directions 2015/16

• Retail Leasing Direction 2015/16

• Leasing Guide 2015/16

• Information Guide 2015/16

The type and combination of retail tenants has a profound impact on the character of The Rocks and, in turn, on visitation and visitor spend. In assessing a prospective tenant’s application to lease a property in this unique precinct, SHFA looks for:

• a vibrant business that fits the preferred retail mix for The Rocks

• a distinctive product, not replicated elsewhere in the precinct

• a business that adds to the overall success of The Rocks.

Our vision is to make The Rocks one of the most envied heritage destinations in the world.

Retail Leasing Direction 2015/16 (As at 23/6/16) 5

1

4 5

2

3

key tRenDs in RetailAcross the globe the rapidly changing retail environment is becoming increasingly more complex, with savvier consumers, shifting demographics and new channel formats all playing a part in the retail revolution.

The future success of the retail industry lies in tailoring the offering to highly defined target markets, rather than the mass-market approach of the past. As a result heritage precincts are now developing into premier retail locations.

When considering the leasing direction, SHFA considers key and emerging trends across three spheres:

1. trends on a global level

2. trends on a local level

3. trends globally in heritage precincts.

TReNDS ON A GLObAL LeveL

• Retail today has experienced a shift, with savvier consumers expecting much more than ever before from their shopping experience.

• Major trends in retail see a general movement toward experience over product, with creativity and engaging with the consumer to personalise the offer more important than ever.

• There’s a return to smaller boutique experiences and service is becoming critical to survive the bigger discount players and online offers.

• Online shopping continues to grow and become an important component of the retail offer. Consumers are spending much more time online before they enter the store.

• Price, location and range shopping has been replaced with experience shopping that integrates all the channels consumers connect to; digitally savvy consumers enter stores already well-informed about a product’s features and prices and expect store employees to know more than they do.

• Providing a seamless approach to the shopping experience through all channels—including mobile internet devices, computers, the store itself, direct mail, television, radio and catalogue—is what consumers expect.

TReNDS ON A LOCAL LeveL

Local trends reflect wider global movements, with particular emphasis on:

• Smaller shops, trendsetters, and unique Australian products that engage the savvy consumer.

• A personal retail experience that tells them a story and takes them on a journey of discovery.

• The creation of a curious, savouring and intimate environment that offers a sensual experience that online shopping cannot.

• A unique heritage atmosphere in a village setting that provides an experiential shopping adventure that consumers desire. People want something they can’t get from major retailers and more than ever they need to understand where products come from and who they are made by.

TReNDS GLObALLy iN heRiTAGe PReCiNCTS

• The adaptive reuse of buildings provides a platform for storytelling, giving consumers a richer shopping experience.

• Building facades are being restored and interior fitouts designed to reveal original features and layers of history.

• There is a juxtaposition between classic architecture and the use of unexpected materials. These include recycled, rustic and natural resources which, when used out of context, create an aesthetic that intrigues the consumer.

• Within The Rocks a Police Station (complete with holding cells) has been transformed into a café, a storage house has found a new life as a thriving dining destination and Australia’s first butcher has been reimagined as a bespoke fashion store. These transformations add excitement and surprise to the shopping experience.

• Other places that embrace this heritage approach are SoHo in NYC, Stockholm, Berlin and Le Marais in Paris.

3

6 Retail Leasing Direction 2015/16 (As at 23/6/16)

Retail Leasing Direction 2015/16 (As at 23/6/16) 7

3

5

4

6

Retail in other international heritage precincts

1 Carlo e Camilla Restaurant & Cocktail Bar, Milan – Italy 2 Mardou & Dean store, Oslo – Norway 3 Soho, New York City – USA4 Gamala Stan, Stockholm – Sweden5 Gestalten Pavilion, Berlin – Germany6 Le Marias, Paris – France

1 2

8 Retail Leasing Direction 2015/16 (As at 23/6/16)

4an enviable visitor profile

LeiSuRe SuiTS

• Affluent white collar workers

• Aged 25–55

• Based in the city

• Casual dining after work bars

Drive demand

CuRiOuSLy CReATive

• Affluent white collar workers

• Aged 18-34

• Based in the city

• Culturally aware

• Creative authentic

Create Atmosphere

SOPhiSTiCATeD TOuRiST

• Loves to discover heritage

• Seeks genuine experiences

• Likes to explore

• Visits galleries

• Fine dining

Drive visitor economy

For The Rocks to achieve its vision, it must appeal to its target audience:

1. Leisure suits

2. Sophisticated tourist

3. Curiously Creative

It is also essential to stay abreast of growing audiences such as:

1. Families from Sydney and around Australia

2. Cruise Ship passengers

Retail Leasing Direction 2015/16 (As at 23/6/16) 9

5

10 Retail Leasing Direction 2015/16 (As at 23/6/16)

ReTAiL ZONeS

Waterfront The waterfront zone skirts the stunning foreshore of Sydney Harbour. It is a place for visitors to soak up the relaxed atmosphere of The Rocks and enjoy world-class views from a selection of luxury hotels and fine restaurants.

Businesses in the Waterfront zone:

• dining

• luxury accommodation

heart of The RocksAt the heart of The Rocks is a network of laneways and winding streets, home to businesses from across the spectrum of the retail mix for the precinct. The emphasis here is on distinctive experiences – bespoke products and boutique venues.

Businesses in the Heart of The Rocks:

• casual and fine dining

• contemporary fashion boutiques

• bespoke craftsmanship

• art galleries

• accommodation

• The Rocks markets

• traditional pubs

• health, wellbeing and professional grooming

Top of The RocksThe upper part of The Rocks offers spectacular high-ground views of the harbour from a network of streets, laneways and public spaces. It is the gateway to Sydney Harbour Bridge for pedestrians and tour groups.

Businesses in Top of The Rocks

• pubs

• accommodation

• tour businesses

The three zones are connected by George Street, the bustling high street of The Rocks and home to the Museum of Contemporary Art and the famous Rocks Markets.

The Rocks has three different retail zones, which are profiled below. The particular location of a new retail business in The Rocks will depend on its fit with the three zones.

Retail zones

1 Retail in the Heart of the Rocks, Denham store2 Waterfront dining, Sydney Park Hyatt3 The Glenmore Hotel, at the Top of The Rocks

1

1

Waterfront

heart of The Rocks

Top of The Rocks

2 3

Retail Leasing Direction 2015/16 (As at 23/6/16) 11

12 Retail Leasing Direction 2015/16 (As at 23/6/16)

6PRefeRReD Retail MixFor The Rocks to achieve its vision it must appeal to its target audiences, and three retail categories have been identified as the pillars of demand for these groups.

1. Food Experience

2. Fashion, Arts and Creativity

3. Health, Beauty and Wellbeing

1 FOOD exPeRieNCe

• After work dining and drinks – from casual to fine dining

• Dining experiences that are about more than food

• Produce and product from premium suppliers

• Quality organic produce, carefully selected and beautifully presented

• Guest chefs, cooking lessons, the ability to recreate at home

• Uniquely Australian

Food experience

1 Pano Brot & Kaffe, Stuttgart – Germany2 The Argyle bistro and bar, The Rocks, Sydney – Australia3 William Blue Dining, The Rocks, Sydney – Australia4 Pony Restaurant, The Rocks, Sydney – Australia

5&6 Germina health food store, Mexico City – Mexico

Food experience

1 Pano Brot & Kaffe, Stuttgart – Germany2 The Argyle bistro and bar, The Rocks, Sydney – Australia3 William Blue Dining, The Rocks, Sydney – Australia4 Pony Restaurant, The Rocks, Sydney – Australia

5&6 Germina health food store, Mexico City – Mexico

1

Retail Leasing Direction 2015/16 (As at 23/6/16) 13

FOOD exPeRieNCe

3

5

2

4

6

14 Retail Leasing Direction 2015/16 (As at 23/6/16)

PRefeRReD Retail Mix 2 FAShiON, ARTS AND CReATiviTy

• The best craftsmanship, design and experiences that Australia can offer

• Show the masters at work and the stories behind their craft – a spectacle and theatre in the making, immersing the customer in the experience

• Bring the bespoke, the one-off and the unique to life

• Gifts expressing The Rocks’ heritage

• Locally designed and made artefacts

• Contemporary fashion for all ages

Fashion, Arts and Creativity

1 Nemika Concept Store, Tokyo – Japan2 Denham, The Rocks, Sydney – Australia3 Retrosuperfuture Eyewear store, New York City – USA4 Joe Bananas, The Rocks Sydney – Australia5 SND store, Chongqing – China

Fashion, Arts and Creativity

1 Nemika Concept Store, Tokyo – Japan2 Denham, The Rocks, Sydney – Australia3 Retrosuperfuture Eyewear store, New York City – USA4 Joe Bananas, The Rocks Sydney – Australia5 SND store, Chongqing – China

1

3

2

4

FAShiON, ARTS AND CReATiviTy

5

Retail Leasing Direction 2015/16 (As at 23/6/16) 15

16 Retail Leasing Direction 2015/16 (As at 23/6/16)

PRefeRReD Retail Mix 3 heALTh, beAuTy AND WeLLbeiNG

• Health and beauty, body balance, wellness, self- pampering, natural products, day spa beauty treatments

• Boutique but with a reputation built in other locations

• Eco-friendly household goods, homewares and domestic products

Health, Beauty and Wellbeing

1 Cosmetics boutique, Krakow – Poland2 Sydney Park Hyatt, The Rocks, Sydney – Australia3&4 Barber Supreme, The Rocks, Sydney – Australia5&6 Okinaha Store, Brussels –Belgium7 Aesop, San Francisco – USA

8 One Hot Yoga studio by Rob Mills – Melbourne

Health, Beauty and Wellbeing

1 Cosmetics boutique, Krakow – Poland2 Sydney Park Hyatt, The Rocks, Sydney – Australia3&4 Barber Supreme, The Rocks, Sydney – Australia5&6 Okinaha Store, Brussels –Belgium7 Aesop, San Francisco – USA

8 One Hot Yoga studio by Rob Mills – Melbourne

Retail Leasing Direction 2015/16 (As at 23/6/16) 17

21

6

7 8

heALTh, beAuTy AND WeLLbeiNG

43 5

18 Retail Leasing Direction 2015/16 (As at 23/6/16)

7PRogRessing the leasing DiRection Stages in implementing and progressing the Retail Leasing Direction for The Rocks in 2015/16

imPLemeNTiNG The bRAND

A new brand has been developed to define the tone and personality of The Rocks. The brand essence, ‘Made by Many Hands’, has values of curiosity, intimacy and savouring, and plays a key role in positioning the future direction of The Rocks. The brand influences communications, the environment and selection of products and services comprising the retail mix. The essential brand characteristics include:

• built by hand and handed down over the generations

• eclectic, charming, unique and full of undiscovered gems

• the heart of Sydney captured in our first retail precinct.

buiLDiNG ATmOSPheRe

To enhance the atmosphere in The Rocks, SHFA is developing a public domain improvement strategy to:

• deliver the ‘window to The Rocks’ with street art, lighting and appropriate welcome signage

• continue to build the atmosphere to improve precinct public seating, greenery and partitions

• improve navigation around The Rocks to encourage discovery, through digital and way finding solutions – stay. linger and spend more time

• implement the ‘Made by Many Hands’ brand strategy throughout the precinct.

TO DeLiveR vibRANT AND CReATive TeNANCieS FOR The FuTuRe

Invite tenants to align with the new revitalised approach with:

• fit out

• branding

• product and service offerings

• digital discovery application

• heritage integration within a creative vibrant place

• participation in place activation initiatives.

1 2 3

Retail Leasing Direction 2015/16 (As at 23/6/16) 19

8contactFor all retail enquiries please contact:

Tim Andrews

0408 616 708

tim@wolfman.com.au

20 Retail Leasing Direction 2015/16 (As at 23/6/16) Disclaimer: This document may be subject to change without notice.

For all retail enquiries please contact:

Tim Andrews

0408 616 708

tim@wolfman.com.au

June 2016

every building in The Rocks has its own story. Property NSW is preserving the stories of the past and inviting new generations to create their own stories in this unique place.