A landlord's story: GPT

Developer The GPT Group has offered several empty properties to the Renew Newcastle scheme. 

David Steele from GPT GPT and Renew Newcastle
GPT's retail development manager David Sleet has made available several empty properties for the Renew Newcastle scheme. GPT's retail development manager David Sleet working with Marcus Westbury and Marni Jackson from Renew Newcastle.

 

In September 2008 David Sleet, retail development manager for The GPT Group (GPT) met with the entrepreneur and creative thinker Marcus Westbury.  For Newcastle in NSW, it turned out to be a match made in heaven. 

GPT, one of Australia's largest diversified property groups, had secured a number of properties in the Newcastle CBD for future development - many of which were vacant in the short to medium term. The reinvigoration of the CBD became an immediate focus.

GPT had been looking at ways to activate the Hunter Street Mall through a combination of retail and community-based projects, while Marcus was launching his Renew Newcastle initiative. 

After that first meeting both parties recognised the value that a complementary partnership could create. 

"At the heart of the partnership was empowering local artists and community groups with a kick start, seeding the creation of original, locally made products, and providing a lifeline for the civic heart to return to its former glory," says David. 

So what made GPT take part in the Renew Newcastle initiative and offer up several properties? 

"We knew that there was a period before GPT's Newcastle CBD development would commence and as a result, we were focused on developing strategies to reactivate the mall," David explains. 

"We had a number of vacant properties for lease, some of which were difficult to lease due to their locations and/or format. These properties were offered to Renew Newcastle for occupation while in their transition phase, with the understanding that they may be required for commercial leasing or rotation should the opportunity present." 

Within months a number of creative industry projects were birthed as the first participants took over a mix of retail and commercial spaces on 30-day rolling licenses.

Risks 

Unsurprisingly, GPT initially had some concerns about offering up empty properties for temporary use. 

"At the outset, we were unsure about the longevity and sustainability of participants in the scheme," says David. 

"Would the businesses be open and for how long? What improvements to the properties would we need to make and at what cost? Who maintains the upkeep of the properties? Who pays running costs? What about breakages and shopfront vandalism? Will we have ongoing issues if a retail tenant becomes available on a commercial arrangement?

"We considered the impact on possible commercial agreements and running costs, along with general legal issues and planning approvals." 

Working in partnership with Renew Newcastle, GPT found solutions to these queries. 

Challenges

The greatest challenge for landlord GPT was the initial setup, says David. 

"The initial setup and negotiations took some time. There was a lot of work in liaising with Renew Newcastle and setting up the properties that may be suitable for the initiative."

The process became smoother as results were achieved and momentum started to build.

"The first batch of Renew Newcastle concepts were reviewed by GPT and Renew Newcastle in order to ensure a good mix of participant types and appropriate uses," says David. "As Renew Newcastle became established, the initiative moved to conducting its own determinations while keeping us in the loop on any new concepts opening.  

"As most of the properties were vacant, and had been so for some time, key issues included the level of repair required in the immediate term. Of major benefit was the opportunity to reuse any surplus items of furniture, materials, and so on for the participants to use, instead of throwing them out." 

Other important considerations for GPT were operational issues, such as controlling the number of participants and any requests for assistance.  The aim was to set up a standard where participants limited work to minor changes, but also had the freedom to renovate older properties in 'sad condition'.  

"This was achieved by working with Renew Newcastle management and the participants in letting them loose on paint schemes, but limiting any structural works," says David. 

"This gives participants a semi-blank canvas to start with, allows freedom of choice on colours and design aspects of shopfronts, but also limits any damaging or risky works."

GPT's properties are located in a Heritage Conservation Area and some of the subject buildings are 'listed' under more prescriptive heritage requirements. Therefore any upgrade works needed to be in keeping with these requirements.  

"There was a need to establish a limited scope of works by the participants as we need to be able to retain the premises in an original condition, but we balanced this with allowing some freedom in presenting a particular design or scheme," says David. 

"GPT wanted to ensure that safety, both occupant and visitor, was not compromised despite the temporary nature of the installation. We allowed minor works without any demolition or wall and ceiling modifications.  

"The majority of the participants limited their works to interior painting, presentation works, and some external facade treatments within a very reasonable limit. 

"At any time, we needed to be able to take back the property–with adequate notice of course–without any penalty to the landlord in rectifying the works, but also without undue pressure on the participant's limited resources." 

Benefits 

Over the course of the partnership, GPT has offered to share over 30 spaces with Renew Newcastle - including the former church that serves as Renew Newcastle's headquarters. 

So what has the landlord got out of it? 

"There are many benefits," David enthuses. "The activation of vacant retail and commercial spaces, increased patronage in the mall, the shifting of the cultural fringe to the inner city, increased cultural awareness and linking of the arts and culture with the community, increased site security and security in the mall, increased public awareness of the overall site, greater public understanding of GPT and our business, support for local small business incubation and, finally, the general infusion of life back to the city's civic centre. 

"The fit out work by Renew Newcastle participants has also improved the presentation of the properties, especially with new paint schemes. This has been worthwhile for potential retail clients of GPT's Hunter Street Outlets, our outlet shopping hub in Hunter Street Mall featuring a range of fashion and mid range brands. 

"It enables them to see the potential of each site and how it can be transformed easily without major costs.  This has been the cornerstone of the newer Hunter Street Outlets design theme; showing how minor expenditure can lead to improved presentation without the need for costly designs.

"There is also an implied financial benefit through the positive impact that all of the above has in reducing unwanted graffiti, vandalism and malicious damage to our properties and the public realm." 

Occasionally–although this is by no means the only measure of success–some participants' projects become viable enough to lead to a commercial lease.

"Indeed, one small business found its feet in a GPT-owned Renew Newcastle site and following its success has since moved out to another site," says David. "Another is currently in incubation. The area generally has been lifted by the increased activity from Renew Newcastle as well as local council and business community initiatives, and GPT's Hunter Street Outlets." 

Agreement

GPT has a head licence agreement with Renew Newcastle that resembles a casual mall licensing agreement. 

Renew Newcastle then sub-licenses to each participant via a participation agreement that GPT agrees to. These participation agreements work on a 30-day rolling system. 

Each participant is required to have their own public liability insurance under the Renew Newcastle scheme, which offers an umbrella policy. 

"GPT has a blanket policy across all properties and we needed to have our insurer's approval to the type of agreement," says David. "This did not cause too much trouble as the insurer recognised that if well managed, the initiative would reduce its exposure."

Successful relationship

The relationship between GPT and Renew Newcastle is an excellent example of how a landlord and an empty spaces initiative can work together successfully. 

"GPT's relationship with Renew Newcastle is very strong and we consider them a true partner," says David. "This is the first time GPT has been involved in such an initiative at this scale. Working with Marcus and the Renew Newcastle scheme has been very rewarding, both for the GPT staff to have taken part on the ground and to the organisation as a whole.

"But perhaps the greatest impact has been felt in the community. We have welcomed the opportunity to encourage locals and visitors to return and rediscover what has been a near-dormant city centre for a number of years. 

"The GPT/Renew Newcastle partnership has opened properties once closed.  It has added to the cultural activity within the city and broadened the exposure of art to all city stakeholders. 

"The Hunter Street shopfronts came alive, there was interest and activity in the city centre and there became a strong bond between the artists and GPT at a grassroots level. 

"It has delivered great benefits to our business, but perhaps not in the traditional sense. It has played a part in broadening the minds of our team as to just what can be achieved, while also demonstrating the benefits of linking sustainable property developers with the creative community." 

GPT logo

Read an interview with Renew Newcastle's Marni Jackson

Read about how Newcastle was 'renewed'

Location

The GPT Group
19 Martin Place Level 52, MLC Centre
Sydney, NSW 2000