VIC furniture retailers flock to large format sector
Furniture retailers are ramping up their Victorian presence and emerging as one of the most active retailer categories in the large format sector, with strong trade growth underpinning a flurry of recent leasing activity.
Leading furniture retailers including Plush and Fantastic Furniture recorded strong sales growth throughout the first half of the 2016 financial year, with 18.8 per cent and 19.2 per cent increases respectively.
Nick Scali and Harvey Norman have also benefited from strong sales growth, with increases recorded of 30 per cent and 7.6 per cent for the full 2016 financial year.
“The aggressive growth from furniture retailers is a result of strong trade witnessed throughout the household goods market, with a 4.8 per cent increase recorded in the year to May 2016,”said Chris Parry, head of large format retail, CBRE.
Several brands have converged on Melbourne’s newest large format retail development, the Bell Street Showrooms, within the evolving suburb of Preston.
The recently completed large format retail development was opened in August, with leases in place to prominent national large format retailers including Adairs, Petbarn, Baby Bunting, Kitchen Warehouse and Amart Sports.
Both Baby Bunting and Amart Sports opened on their doors on August 20, whilst Petbarn have commenced fit out and Adairs are expected to open in October.
The development comprises 7000sqm of large format retail floor space, over 260 car spaces and modern facilities.
Parry said the confidence from leading national brands to pre-commit to a development such as the Bell Street Showrooms demonstrates the current strength of the Victorian large format retail sector.
“The commitment from national brands to the development further represents a shift in the Preston large format retail market, which has traditionally been focused on Chifley Drive and Murray Road around the two homemaker centres.”
“Retailers are now more willing to relocate from the traditional precinct to Bell Street, with recent examples including JB Hi-Fi, The Outdoor Furniture Specialist, Super Amart Furniture, Beacon Lighting and Lombards.
“These brands have positioned themselves on Bell Street due to the extremely low vacancy in the market, which is prompting retailers to look at alternate locations for strategic expansion opportunities,” said Parry.
Melbourne brand Koala & Tree has also recently leased the final 986sqm vacancy at GPT’s Maribyrnong Homemaker Centre – representing the retailer’s sixth Victorian outlet.
“The expansion of Koala & Tree reflects the recent strong performance and growth of furniture retailers across Victoria, which has continued since 2015 when furniture groups emerged as the most active retailer category,” said Tom Perkins, CBRE.
The Maribyrnong Homemaker Centre, has a strong retail mix – with major brands including Spotlight, Plush, Forty Winks, Snooze, Petbarn and Carpet Call established in the centre.
“The ongoing growth of the large format market is further represented in the strong annual reports from major retailers, with Baby Bunting, Petbarn and Adairs highlighting positive sales growth of 12.5 per cent, 4.4 per cent and 11.7 per cent respectively,” added Ryan Arrowsmith of CBRE’s large format retail team.
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