Redeveloped Masters sites to go live within three months
Five of the ten multi-tenant locations will open in October and November, including sites in Rutherford and Penrith in New South Wales, Tingalpa and North Lakes in Queensland, and South Morang in Victoria.
They will be separated into three formats, including daily needs, lifestyle and leisure and homewares and related services based on varying local demographics, existing retail supply and regional planning considerations.
A further 20 sites will open in 2018, with the remaining centres in the 82-site portfolio to launch in 2019, the vast majority of which will be taken to market as self-contained multi-tenant large format centres.
Eighty per cent of the more than 500,000 sqm of retail space is already leased and the remainder is covered under memoranda of understanding with national retailers.
Former UBS Australia boss and Home Consortium head David Di Pilla, who spearheaded the acquisition of Woolworths’ Masters portfolio for $750 million in October last year, told IRW that the formats have been designed with both customers and operational considerations in mind and are largely based around anchor tenants.
“The leasing success and ongoing lease enquiries we have achieved reflects the fact that retailers have been able to work with a single developer or landlord to plan and secure their store roll-out,” he said.
“It’s a retail proposition developed by retailers for retailers. We’ve worked on a case by case basis with each retailer to make sure the proposition works for them.”
The daily needs format will involve supermarket and chemist tenants such as Chemist Warehouse, while the lifestyle and leisure centres will encompass retailers like Baby Bunting, Spotlight, Anaconda, and Super Retail Group’s BCF and Rebel Sport.
The homewares and related services format has been designed like a traditional homemaker centre, with tenants like Nick Scali anchoring seven such centres and JB Hi-Fi understood to be involved.
Wesfarmers-owned hardware chain Bunnings has taken eleven of the sites, with a conversion on the Masters site in Mount Gambier approaching completion.
Di Pilla said tenancies vary in size, as retailers have been consulted individually over the last 12 months to develop suitable stores. Roofs have been lowered on a number of the stores to combat initial fears about a warehouse-style setting and many anchor tenants have their own exterior entrances.
The number of stores per site ranges from four to more than ten, with planning documents lodged with Moreton Bay Regional Council revealing an eight-store layout with sizes ranging from 500sqm to more than 2,500 sqm.
The Home Consortium Venture is being backed by the families behind Chemist Warehouse and Spotlight Group, both of which have signed on for stores within the centres.
Property investment and management group Primwest also came onboard after the initial deal in November, with founding members David Schwartz and John Bond joining the Home Consortium Board as directors.
Cushman & Wakefield have been appointed to manage the centres nationally, while Colliers International has been appointed as the leasing agent for NSW, Victoria and Queensland.
Four construction firms have been engaged on the redevelopment of the first ten centres, with further construction and repurposing to be conducted over the next 18 months.
Anthony Scali told investors at his full year results briefing last week that rental terms were favourable, and that the Home Consortium opportunity had been very beneficial.
Chief financial officer Kevin Fine told IRW that while Nick Scali was sceptical about the multi-tenant large format concepts at first, Home Consortium had addressed concerns and they’d managed to “cherry pick” suitable sites.
“We’ve been negotiating the structure for almost a year and that’s resulted in number and the size store that we want,” he said.
IRW understands that Nick Scali will be among the first stores set to open before the end of the year, with Fine leaving the door open to opening more stores within the Home Consortium portfolio in FY19.
Once the openings are complete, Home Consortium will be one of the largest big-box landlords in the country, with over 8000 retail jobs slated to be created by the centres.
It will also ease demand for large format retail space in New South Wales, which has been an ongoing concern for the Large Format Retail Association for several years.
“We have been encouraged by the enthusiastic and constructive respond by local councils and state planning authorities to our re-development proposals,” Di Pilla said.