traditional homemaker offerings of furniture, bedding and electrical to include a wider variety of lifestyle stores. At the same time, large format retail properties are becoming more uniform in their appearance, as landlords and tenants identify clear construction and design requirements to appeal to consumers. “10 years ago, large format retail was mainly dominated by industrial developers who had surplus land and wanted [to put it to] higher and better use. What it’s become is now an asset class defined on its own like a neighbourhood or regional sopping centre,” Parry told Inside Retail Weekly. “From an investment point of view, it’s a lot more sophisticated. That’s clear when you look at groups like Aventus amassing properties and then going public.” The changing retail mix is one of the key factors enabling large format retail property groups like Aventus to thrive, since more varied tenancies are seen as less risky to investors. Drawn by cheaper rents, pet supply stores and baby goods retailers were the first non-typical large format retailers to enter Australian homemaker centres a few years ago, driving mid-week traffic to areas that were traditionally shopped only on the weekend. This created a positive feedback loop, as more traffic attracted different retailers, which in turn brought in more traffic. “What’s happening now is we’re getting alternative uses that are bringing some of these groups that were strictly High Street or shopping centre into homemaker centres because they’re no longer just furniture, bedding and electrical,” Parry said. Companies in the leisure category, such as play centres and gyms, are now entering homemaker centres, and Parry says one large format retail centre near Moorabbin Airport in Melbourne briefly contemplated adding an airport lounge to its list of tenants. While that vision never came to pass, other markets show that an even more diverse retail mix is feasible.   “When you go to America where this asset class has been around for a lot longer, there are a lot more different uses, so you have Nordstrom Rack with their off-price fashion, next to a large format hunting store, next to a large format furniture store,” he said. “I don’t know whether it will go that way [in Australia], particularly with the dominance that the Shopping Centre Council has, but [the market] is certainly evolving and I think that’s something that will continue to happen. The offering you’re getting is not just traditional homemaker; it’s now a lifestyle centre with a homemaker offering.” Differentiate to grow One reason to think the retail mix will continue to expand is that it gives developers and investors an opportunity to differentiate their offering from other retail centres and attract a different type of customer. This is already proving beneficial, according to Justin Ganly, managing director of retail and economics consultancy, Deep End Services. “The best example of this would be people using gyms,” Ganly told Inside Retail Weekly. “They are typically a much younger clientele than would normally have visited [large format retail] centres. And again the benefit there for the retailer is that they’re being exposed to a wider age range of potential customers. Having more people walking past their door must give them an increased opportunity. It’s increased frequency and dwell time,” he said. That’s what happened when indoor play centre, Tunzafun Xtreme, moved into the retail centre at Knox in Victoria, according to the brand’s director, Leo Neophytou. “Without doubt, the other retailers parasite off the customer count that we bring to the centre,” Neophytou told Inside Retail Weekly. “We end up being more of an anchor than any other tenant. And we’ve found that the landlords tend to use us as a draw for other retailers,” he said. Tunzafun Xtreme started looking at large format retail centres as an alternative to shopping centres about two years. “We realised our brand was strong enough in our own right, so we didn’t need to rely on the shopping centre to bring foot traffic in.” The larger spaces, required to accommodate Tunzafun Xtreme’s mix of laser tag, arcade games, climbing walls, mini golf and other attractions, and cheaper rents available in large format retail centres, didn’t hurt either. Tunzafun Xtreme Another sign of the market’s maturation is the increasing uniformity from a construction and design perspective. The days of the converted warehouse are long gone, with new developments consistently featuring tilt slab construction, suspended or sprayed out ceilings and air conditioning, as retailers look to provide a more customer-friendly shopping experience. Likewise, same-level parking is now considered a must, according to Parry. “We’ve found that some retailers won’t commit to a site unless they can get that drive-up car parking,” he said. The multi-level development at Marsden Park in NSW solved this problem by building a multi-level car park alongside the retail centre. The changing LFR scene While convenience will always be a factor for customers who visit large format retail centres, sophisticated developers are now also trying to create pleasant environments where people want to spend more time, rather than just rushing in and out to get what they need. Investment in landscaping and the addition of restaurants in large format retail centres are strategic tactics to improve the customer experience.   At the same time, there has been little new construction on a large scale in the last year. Recent developments including the Marsden Park Home Hub in NSW (17,500sqm) and Mentone Homemaker Centre in Victoria (12,500sqm) pale in comparison to the Gepps Cross Home HQ, which opened in 2009, covering 60,000sqm. One reason for this is the GFC in 2007-2008, which many investors believed would negatively impact discretionary spending on home goods. Parry notes that large format retail actually saw fewer administrations than traditional retail sectors as a result of the GFC. Another reason was Bunnings’ race to upscale, which saw the hardware store moving into larger boxes and making a number of smaller properties available. But the rise in the development of these smaller centres (typically between 10,000-15,000sqm) has also created a separation in the asset class, with lifestyle brands attracted to the smaller footprints, while traditional large format retailers – furniture, bedding and electrical retailers – want a critical mass. This feeds back into large format retail’s broader shift towards lifestyle, which, for Parry, is more about refinement than radical change. “The majority of these are retailers you still need to drive up to. You might look at Pet Barn and say, ‘hey, it’s a pet store and it should be on the High Street’. But in reality it’s impossible to carry a 10-kilo bag of pet food down the High Street or through a shopping centre. “The reason large format retail centres were developed is still true.”