Lockdowns, store closures and online surge weigh on Chadstone shopping mall

Locked-down shoppers, retail restrictions and a surge in online sales have bitten deep into the value of the shopping mecca.

Locked down shoppers, pandemic retail restrictions and a surge in online sales have wiped $600m from the value of shopping and entertainment mecca Chadstone.

Vicinity Centres, which owns the mega mall alongside Melbourne billionaire John Gandel, has again cut the value of its flagship asset amid the ongoing coronavirus crisis.

In an update lodged with the stock market on Thursday, Vicinity revealed it had shaved another 2 per cent from the book value of Chadstone.

The valuation period covers the six months to December when Melbourne was put into a strict second lockdown.

Chadstone during the Boxing Day sales.

Vicinity now lists its 50 per cent stake in Chadstone as worth $3.06b, valuing the entire complex at $6.12b.

That is $630m, or 9.3 per cent, less than the $6.75b the centre was worth at the start of last year, before COVID-19 rolled across the nation.

Vicinity owns or has a stake in 60 major shopping centres including The Emporium, DFO outlets, Bayside in Frankston, Northland in Preston and The Glen at Glen Waverley.

Those assets have been hit harder than Chadstone by the pandemic.

Vicinity cut the value of its total portfolio by 4 per cent, or $569.6m, to $13.6b over the six months to December, its latest update shows.

Since the start of pandemic is has slashed the value of its portfolio by 14 per cent, or a hefty $2.1b.

Its latest update did not break out individual valuations of malls beyond Chadstone.

The downgrades follow shoppers being kept or staying away from major malls and what many retail analysts view as a permanent and accelerated shift towards online brought on by the pandemic.

Vicinity Centres chief Grant Kelley pictured before the pandemic.

Vicinity chief executive Grant Kelley said the shopping centre giant would continue to feel the impact of the pandemic throughout 2021.

“While we remain cautious on the impact of potential future outbreaks of COVID-19 on retail trade, and the challenges of the evolving retail environment, we are encouraged by a number of factors,” he said.

“Australians have shown that they are excited to return to their favourite retail destinations with customer visitation bouncing back strongly over the Black Friday and Christmas periods.

“We have been pleased to see visitation and retail trade pick up in our Victorian assets following the lifting of the state government’s Stage 4 restrictions.”

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