Melbourne, 29 January 2015 – H.Troon, a145-year-old development and construction company based in Ballarat, has purchased the Mentone Centre Stage 2 development from Bunnings and is pushing ahead with construction.
Tenancy pre-commitments have been obtained for over 80% of Mentone Centre Stage 2 - a development lauded as a true test case for Victoria’s recent planning reforms.
This significant new retail development, which is anchored by Australia’s largest Bunnings warehouse, is situated at 27 – 29 Nepean Highway. It is being marketed for lease by Chris Parry and Ryan Arrowsmith of CBRE’s Large Format Retail team, with completion expected by early this year.
When finalised, the overall development will comprise over 32,000sqm of Large Format Retail space and will be the 5th largest centre of its kind in Victoria.
Chris Parry, Director of CBRE Large Format Retail said; “What has made the Mentone Centre so distinctive is that it’s a true test case for Victoria’s recent planning reforms. The unique retail mix has been targeted and designed to create a strong seven day trade and maximise the benefits of being able to have a supermarket on commercial 2 zoned land.“
Mr Parry added; “While Large Format Retail and Homemaker Centres have traditionally been depicted as weekend traders, we are confident that the Mentone Centre retail mix will change this thought pattern.”
Stage 2 of the Mentone Centre is over 80% pre-committed and will include as Aldi supermarket, Spotlight, Tasman Meats, Petbarn, Amart Sports, Pillow Talk plus other national brands. Research indicates that recent deals along the Nepean Highway strip have ranged from rents of $230sqm - $350sqm plus GST and outgoings.
CBRE Research Analyst Philippa Bordonaro said the diverse tenancy mix was part of a broader trend in the Large Format sector. This was highlighted by the fact that in 2011, Victorian Large Format Retail Centres comprised 36% ‘Furniture, Floor coverings and Light Fittings’, whereas in 2014 the same category made up 29% of Victorian centres, representing a 7% decline.
“This demonstrates that Large Format Retail is beginning to see a shift from traditional retailers, to a retail environment which welcomes a variety of other tenant types,” Ms Bordonaro said.
A recent report by CBRE highlighted that there is approximately 42,215sqm of multi-tenanted Large Format Retail space under construction across Victoria. This represents a strong shift from 2012/13 where specialty leasing was concentrated in existing stock and new floor space was largely driven by the Bunnings and Masters Hardware race.
In relation to the Mentone Centre, Mr Parry said the pre-leasing campaign had been well received following improved retail conditions, particularly in the household goods sector as a result of stronger consumer sentiment and healthy population growth.
“We only have four showrooms remaining for lease which we expect to be taken up by national brands,” Mr Parry said.
The Mentone Centre was first proposed in 2007 by a joint venture between Harvey Norman, Charter Hall and Pivot Group but was shelved due to the GFC and was later sold.
“The start of construction on Stage 2 represents a bottoming out of the doldrums that were experienced by the Large Format Retail sector in 2012 and 2013 and is a response to the growing demand from retailers looking to expand their footprint,” CBRE’s Ryan Arrowsmith said.
For further information regarding the Mentone Centre contact Chris Parry 0420 304 185 or Ryan Arrowsmith 0419 335 634 of the CBRE Large Format Retail leasing team.
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