Shoppers are unleashing their wallets in one of the city’s busiest malls, Melbourne Central, but the retail tsar running the centre says a return of workers full-time to city offices will make little difference to its trade.

Chris Barnett, head of retail at $8.8 billion property landlord GPT, says there has been a notable shift to weekend shopping and a rise in foot traffic, with about 50 million people a year passing through the shopping mecca that covers almost half a city block above one of the city’s busiest subway stations with the same name.

The centre’s robust foot traffic contrasts sharply with modest numbers making their way into city offices. Melbourne lags well behind other capitals in daily office attendance, which is 61 per cent on average compared with pre-pandemic levels. This prompted Melbourne Lord Mayor Nick Reece this week to push the state government to take a tougher line with public servants whose flexible work arrangements require them to show up just three days a week.

“I’m going to put my GPT hat on now and say, as the second-largest commercial office owner in Melbourne’s CBD, we would embrace that [lord mayor’s] direction. But as the head of retail, it would only be incrementally beneficial for us,” Barnett said.

“We’re at record number of sales coming out of Melbourne Central. At the moment, our productivity is continuing to grow,” he said.

GPT’s confidence is reflected in the latest official retail sales figures, which show a 3.8 per cent year-on-year lift in January, although that was – as markets expected – slightly below December’s bigger 4.6 per cent bump.

Analysts at investment giant Jarden questioned in a note to clients this week whether January’s figures were a “New Year hangover or a party just getting started”.

They suggest January’s slight decrease from the previous month reflects slowing household goods sales after consumers had brought forward furniture and electrical purchases into the peak cyber sales and Christmas trading period.

“Looking forward, we would expect spending trends into 2025 to further improve as rate cuts hit, confidence lifts and we see broader-based growth in spending across all demographics,” they said.

Barnett said GPT was moving to take advantage of the better outlook, launching its first major centre redevelopment in a decade at Rouse Hill in Sydney’s north-west.

The shopping centre, which “hasn’t had a vacancy for the last three years”, is fully leased but will add about 10,500 square metres of space for an extra 50 speciality tenancies, with footprints about 30 per cent larger than the existing 230-odd specialty stores.

GPT chief executive Russell Proutt said the Hills district population was growing at five times the rate of Sydney’s metro areas, and the centre’s foot traffic had increased progressively since it was first developed in 2008. “Investing to bring more choice of fashion, dining and leisure to the district was an easy decision,” he said.

The $200 million revamp will boost the value of the mall to almost $1 billion.

While Rouse Hill is the first cab off GPT’s upgrade rank, Melbourne Central is also on the books for an overhaul. The property manager will lodge plans in the next couple of months to add another two levels to the complex, with the aim of starting work next year.

Proutt said, while retail had had a “rough decade”, retailers were now comfortable with the online and bricks-and-mortar model and with centres being a “destination” for shopping. “We’re in a country that has growing population, GDP growth and, as much as there’s some household stress, we have seen, and continue to see, good spending in retail,” he said.

“Retail is one of those property sectors where scale matters. We’re now at $14 billion assets under management, almost all of them we manage ourselves, and we can attract the talent and people, invest in the systems and processes and amortise it over that larger base, and actually do better for our tenants.”

“You put that all into the mix, and it’s resulted in GPT performing extremely well on a comparative basis,” he said.

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