ISPT Katoomba Village: greedy landlord rent-hikes force retailers broke and to walk away

April 8, 2023

Coles ‘Katoomba Village’ is a corporate-owned shopping plaza development in Katoomba situated in Parke Street which opened in 2012.

Before and during the 2020-22 pandemic, four of its retail plaza retail tenants were driven to the wall – locked out, forced to walk away from their businesses and livelihoods due to the greedy Sydney based multi-billion corporate landlord.

These long popular Katoomba retail business victims being:

Katoomba Prime Meats (Katoomba’s established independent butcher shop)
Deli Xpresso (a health café and delicatessen)
Flight Centre (a long-established travel agency)
Donut King (a doughnut café)

Background to Coles Katoomba Village of 2012

In 2012, the Coles supermarket in Katoomba relocated from its old Woolworths-owned site from nearby Waratah Street and re-opened at a new site up the hill at what became 30-34 Parke Street.

The large hectare-sized combined site had previously featured the old abandoned TAFE college building (suspiciously firebombed in 2001), a Roads and Traffic Authority branch (which Council agreed to co-opt its services at Council Chambers), as well as the Macarthur’s Retravision electrical goods store, an independent hairdresser, plus a number of car parking spaces.

Collectively, this sizeable site acquisition was sold off by Blue Mountains Council some years prior to industry superannuation fund management corporation Industry Superannuation Property Trust (ISPT) for an undisclosed sum. ISPT currently boasts a $22.2 billion commercial property portfolio and is headquartered in Melbourne.

The sale was publicised by Council as being for a new ‘Blue Mountains Cultural Centre’, but that outcome was only part of Council’s closed-door deal and a minor part at that. The sale prices was never publicised.

It is note that Council at the time of the property sale and since then has been dominated by Australian Labor Party councillors including a few mayors. It is note that the Australian Labor Party has a record of deriving considerable undisclosed donations from organisations managing industry super funds.

Sale sealed behind closed doors, new owner ISPT went on to brand this new internal plaza forecourt area as ‘Katoomba Village’. The naming being a marketing ploy, since the traditional Katoomba retail village was nearby in Katoomba (high) Street.

Coles supermarket chain store was of course the plaza’s retail anchor tenant. As a grocery shopping magnet to consumers, this was ISPT’s lure to entice small complementary retail tenants to its indoor plaza in the forecourt outside the public pedestrian entry to Coles.

This is what corporate retail landlords do. They typically muscle in to dominate the shopping precinct such as Katoomba, taking over market share such as:

A fully indoor plaza shopping centre, centrally located near the traditional high street
A large comprehensive supermarket chain store like Coles as the anchor shopping attraction
Complementary retail tenants in the pedestrian plaza approaching Coles entrance
Free two-level basement undercover parking
Walking travellators
Central air-conditioning.
Upon first opening, Coles spending millions heavily promoting the store and its offerings and can afford to initially undercut prices below cost to lure customers away from the pre-existing independent retailers on the high street.

As more and more customers shop at the corporate retail plaza, fewer shoppers visit the traditional high street. As the plaza gets busier and busier, eventually the high street retailers lose their trade such that they cannot break-even, so they close down. This is exactly what has happened to Katoomba’s high street since the Coles plaza opened in 2012.

Two years prior, multinational competitor ALDI supermarket chain store had opened nearby in Waratah Street soon afterwards in 2010. Competitor Woolworths supermarket chain store opened nearby in Waratah Street soon afterwards in 2014, along with its Big-W department chain store.

Blue Mountains councillors approved all three massive supermarket developments for Katoomba. And now they wonder why interconnecting Parke Street over Yeoman Bridge to the Great Western Highway is usually congested with long lines of cars of supermarket shoppers? Mostly they turn right and head back down the Mountains because the nearest supermarket equivalent besides Woolworths Metro (small store) at Leura or Supa IGA at Springwood (30km) is at Westfield Penrith (50km).

Well, approve more supermarkets in a cluster site like Katoomba and more shoppers will come to shop there; hence gridlock traffic typically on Friday paydays.

Independent specialist food service provider Colless Foods shut down its Katoomba operations permanently in December 2022 after 67 years of trading.

Plaza Victim 1: Katoomba Prime Meats

The phone number remains disconnected to date

In Katoomba’s high street long established independent butcher shop Peter’s Meats at nearby 97 Katoomba Street was lured to relocate to ISPT’s Coles Katoomba Village before it opened. Likely, the corporate retail plaza’s introductory rent was competitive and so enticing.

Peter’s Meats then relocated away from its established high street location into the Coles plaza. In the process the business was forced to name change, so the butchers went with ‘Katoomba Prime Meats‘. The high street lost its only butcher shop. This author used to shop there regularly.

Over the years, ISPT steadily upped the rent. As a customer, one started noticing the sale portions pushing the friendship on the scales and then the sausages getting very fatty on the BBQ – like serious saturated and trans-fats. The butcher’s profits had obviously been squeezed, but now they were locked in to a big brother ISPT corporate rental contract, akin to that of a Westfield tenant.

Then suddenly, Katoomba’s last high street butchers were gone from 2012 – lured by the corporate landlords from Sydney.

Katoomba retail high street (and ISPT) victim #1

The second butcher shop owner of ‘Katoomba Prime Meats’ lasted a few years, before the plaza’s customer travellator from the basement car park failed and was out of action for some six months or so.

The butcher complained to this author that it had adversely affected his sales. Yet, ISPT’s rents continued and even increased…until he could not afford the rents. ISPT promptly locked him out, over-night fabricating a timber wall with a padlocked door to deny all access to his stock and equipment.

Blue Mountains councillors all approved this.

In October 2021 during the pandemic lockdown, Coles Supermarkets nationally decided to do away with its in-store butchery operations, sacking about 1500 trade-qualified butchers, apprentices, and meat workers. This was despite statistics showing consumer demand for butcher serviced and quality meat soaring at the time. Coles reverted to its centralised portion-cutting and retail-ready packaging of meat.

So, Katoomba shoppers now must put up with self-service and prepackaged vacuum-sealed meat sitting on shelves for days in plastic. If they want a real butcher with personal service and flavoursome cuts of meat, then they need to travel to Leura, Blackheath or Wentworth Falls.

The current retail tenant in Coles plaza where Katoomba’s last butcher shop was, is now a bloody tobacconist and lotto shop – downgraded to ‘bottom-feeding’ smoking and gambling.

Meanwhile, a connected story back in Katoomba’s retail high street…

The purpose-built butcher shop sat vacant and the premises up for sale for seven years.

Finally, in February 2019, the old Peters Meats butcher shop was bought outright by enterprising foodies Robyn Bennett and John Healy (below) financially supported by investor buddies Deborah Shaw and Des Devlin.

The timing was pre-bushfires and pandemic.

Robyn and John put in a considerable amount of time, effort and money into stripping the long standing butcher shop and converting it into an alternative vegan/vegetarian café. The butchery serving area was ripped out and replaced by chairs and tables, the old cool room ripped out and converted into a casual lounge area, the butchers’ meat preparation area remodelled into a commercial kitchen.

Ironically, Robyn (a pescatarian) and John (a vegetarian) created Katoomba’s first vegan/vegetarian eatery out of the old butcher premises. They managed to converted it imaginatively named it ‘Plant-based Wholefoods‘- all animal blood ghosts thus effectively exorcised perhaps. Times change.

The vegan café became mildly successful and feature live folk music. It became a complementary quirky venue adding to Katoomba’s quirky creative reputation for homegrown and alternative eateries, artists, artisans, and folk entertainment.

But startups take time, often years, to build up a consistent clientele week-in week out and to fine-tune the business offering beyond break-even into constant profitability.

But as with many business owners in the Blue Mountain, the entrepreneurial owners of Plant-based Wholefoods could not have foreseen the economic calamity of 2019-2022. It was unprecedented. Alas, by October 2022 the Plant-based Wholefoods initiative was no more.

All that inspiration and effort by idealist entrepreneurs prepared to take on converting an old purpose-built butcher shop into a contemporary quirky vegan cafe.

But it was to appeal only to an alternative low-budget limited market.

Personal wealth and invested hours poured into another dream to make a go in private retail enterprise. But without startup finance, rent relief, government support – the finance payments and rent commitments wait for no-one.

So, again Katoomba and the Blue Mountains lose creative spirits with their investment capital with a vision to contribute to our alternative community, and daring to take personal risks and to have a go.

Could rate-taking insular Council on the other side of the highway care?

They have set up their own cafe in house in the customer service centre.

Plaza Victim 2: Deli Xpresso

This café delicatessen was set up as Shop #1 in the plaza pedestrian forecourt in prime position directly outside Coles only entrance. The café delicatessen was similarly constructed ready for opening in 2012.

For the near decade that Deli Xpresso was trading, Nature Trail would frequently shop there for convenient and healthy trail catering supplies. The food selection included freshly cut and packaged array of gourmet sandwiches, salads bowls and cut fruit bowls as well as small fruit juice drinks and ready to go, and the quality was excellent.

We would also recommend to tourists at the volunteer visitors centre to have breakfast or lunch there before heading off on a local hike.

But then one day in 2022, we went to buy our supplies only to find the deli and café all boarded up to our disappointment. We are based nearby and there was no other place like this in Katoomba.

Xpresso Deli boarded up by the corporate landlord

Victim 3: Flight Centre Katoomba

Before the establishment of Coles indoor shopping plaza on Parke Street, this travel agency was initially situated in Katoomba ‘s high street at 127 Katoomba Street, towards the lower end of the street opposite the ugly brutalist Telstra substation.

Just as Peters Meats was lured by ISPT into the new plaza with a low starter rent the promise of more pedestrian trade, so too was the Flight Centre travel group. Then came the Parks Service bushfire holocaust [Oct 2019 – Feb 2020] back-to-back with the government pandemic lockdowns [Mar 2020 – Mar 2022].

Flight Centre was severely impacted globally as governments banned travel outright, so there were not travellers and so no customers for Flight Centre. In March 2020, Flight Centre instantly closed 100 stores across Australia due to business impact from coronavirus fears. It announced that 6,000 support and sales workers will be made redundant or temporarily stood down globally, including 3,800 in Australia. That is industry destroying stuff! Staff will not return, and didn’t.

The following month Flight Centre announced it would shutdown as many as 428 Australian stores. By October 2020, another 91 stores were shut down, this time including the Katoomba store. ISPT didn’t lower the rents in its Katoomba Village, but arrogantly increased them instead.

Post-pandemic re-opening of borders and travel, Flight Centre chose not to reinstate its Katoomba store. The lease has currently been taken up by franchise barber Sam’s United Barbers.

Plaza Victim 4: Donut King

This was a franchise outlet and whilst we never bought doughnuts at this small café, when it was no longer there, we felt a sense of emptiness in the plaza forecourt.

Currently there is a small pop-up mobile phone desk in the same location. They term it ‘casual leasing’. Who’d want to take the risk of permanent leasing?