The threat of online retailers such as Amazon is not fazing Australia's wealthy shopping centre owners – of whom five are in the top 30 of the BRW Rich List.
Instead, they are believers in the need for real-world interactions and think bricks-and-mortar retailing will remain strong for a long time to come.
Westfield's Stephen Lowy has warned Australia's main players are "not investing sufficiently in technology" for the hit that groups such as Amazon are about to deliver, but many of his rivals believe that keeping shopping centres as a place for entertainment will continue to pull the crowds and the spending.
Billionaire Bob Ell has a strong view on the future of retail in Australia. He owns major shopping centres in Ipswich, Morayfield and Victoria Point, all in Queensland, and Tuggeranong in Canberra, and says technology is not really going to have the painful affect many fear.
"Technology is obviously always going to have some effect and take a percentage away from the market," Ell tells AFR Weekend.
"The Amazon shopping style will grow but there is still a thrill taking the wife and family shopping. It's entertainment, people still want that. People don't want to be locked up in the house all day, they want to get out and see what's going on in the world."
While many mall owners are rapidly deploying technology to try to track retailers and influence spending habits, Ell is not that convinced of any such need.
"I'm not into all that technology stuff Westfield are doing, like the Apple watches – my kids have Apple watches – but I just think it's a bit confusing to other people.
"We just make sure [the centres] are good, clean, open places – bright and breezy and entertaining."
His confidence is still evident in the market for those wealthy investors still keen to buy and hold major shopping centres around Australia.
Billionaire's still buying and developing
One of the major shopping centre selling agents, Sam McVay from McVay Real Estate, says there has never been so much private wealth still looking to buy into Australian shopping centres.
"This is accentuated when we talk about the most successful and wealthy individuals in Australia," McVay says. "They understand it, it gives them superior risk-adjusted returns, and they don't make mistakes."
West Australian businessman Stan Perron, who at 94 is the oldest member of the BRW Rich List, sold Sydney's Campbelltown Mall last year but quickly bought up a half stake in Westfield Woden from GPT Wholesale Shopping Centre Fund for $335 million and the Runaway Bay Shopping Village on the Gold Coast with a price tag of about $140 million.
His Perron Group has joint ventures with institutions such as Westfield, Mirvac, Vicinity and Dexus and also famously paid $690 million to buy half stakes in three then named Centro malls in 2012.
Billionaire John Gandel sold his substantial stakes in the $2.8 billion Charter Hall Group and the $1.6 billion Charter Hall Retail REIT in September last year to reap about $500 million but he is still the part owner of Australia's biggest mall by sales – the Chadstone Shopping Centre on the outskirts of Melbourne. There he has seen a $660 million investment to expand that shopping centre, and he is standing by retail in Australia.
He said late last year that he did not see any downturn in retail property.
"With all the incoming international retailers, the field is getting pretty crowded but with good operators. At this moment, I don't see any major downturn."
But he says shopping centre owners need to make sure their spaces have consistent quality.
"One of the things that we've always been conscious of is that we don't want to create better and worse areas," Gandel says.
"There's always been a harmonious blending between all levels of retail.
"People shouldn't feel they've walked into a super high-class area and then they take 10 steps and they walk into a lower grade."
And while the Lowy family is sceptical about the level of technological uptake by Australian retailers, they are still confident enough in the sector to maintain their 4 per cent stake in Scentre Group – the largest shopping centre owner in the country and the owner and operator of Westfield in Australia and New Zealand.
Several other billionaires, including many who shy from public attention, own major shopping centre holdings in Australia.
These include the founder of Dreamworld on the Gold Coast, John Longhurst, who owns a half share in the Logan Hyperdome south of Brisbane which is worth well over $400 million.
Billionaire John Van Lieshout is another who has continued to buy shopping centres. He purchased the Industry Superannuation Property Trust's Kessels Court in Brisbane's north for more than $30 million as part of his strategy to acquire under-developed centres.
Lang Walker, Con Makris, Gerry Harvey and Brett Blundy are other billionaires who have all created their wealth from retail centres and have continued to invest in them.
'You have to be online and in bricks'
Part of their confidence lies in the idea that there will always be a need for a bricks-and-mortar retail presence.
The online Perth retailer Kitchen Warehouse is actually embracing a bricks-and-mortar expansion strategy on the east coast, replicating Amazon's strategy to also have a physical presence.
"The way forward for us is not as a pure play online retailer or bricks-and-mortar business, but as a combination of both. You have to offer both," Kitchen Warehouse director Chris Murphy told the Financial Review.
Internationally, even Chinese online retail giant Alibaba understands the need for a physical presence. It made a $US2.6 billion bid for Intime Retail, a department store and mall operator in China, just last week.
McVay says the threat of technology will still remain, but there are some things you just can't buy on the internet.
"Technology will continue to play a part but there are many products, goods and services that are 'un-Amazonable' and that provides for an exciting opportunity for bricks and mortar retail to improve further."
BRW Richlister Shaun Bonett owns several prime shopping centres in cities around Australia including Melbourne, Adelaide, Brisbane and the Gold Coast.
Bonett says almost all retailers have developed, or are in the process of developing, omni-channel business models that recognise the importance of retail property.
"Even the pure technology companies are now all including a bricks-and-mortar presence as part of the delivery of their products and re-enforcement of their brands," he said.
"The added costs of delivery coupled with the inherently "social" experience of shopping has led retailers to embrace retail property as part of their marketing and delivery platforms to their customers."
He says technology is requiring landlords of retail centres to invest in enhancing the consumer experience as well.
"This is both a pressure and an opportunity for landlords whom appreciate the fundamental importance of needing to do this and can do it well."
He says technology has provided increased choice and flexibility to the consumer, but that bricks-and-mortar retailers have the opportunity to distinguish themselves with exceptional in-store service, which is something that technology will take "a long time to be able to compete with".
"International brands understand this and are rapidly expanding their global footprints."
This week international listed retailers including Denmark's Pandora and Canada's Lululemon Athletica both took up space in Bonett's Adelaide Central Plaza alongside brands such as Tiffany & Co.
