Melbourne’s large format retail sector is bucking the state’s downward retail trend, recording strong tenant enquiries and a string of new deals.
In the latest commitments, home entertainment retailer JB Hi-Fi and pharmacy group Chemist Warehouse have both negotiated new leases in Chadstone Homemaker Centre.
Leading trade tool retailer Sydney Tools and Australia’s largest auto parts and car accessories retailer Repco have meanwhile leased new space in Caroline Springs, while automotive aftermarket accessories retailer Autobarn has committed to the Lincoln Mills Homemaker Centre in Coburg.
The CBRE negotiated deals signal ongoing interest in the large format sector despite the current COVID lockdown.
CBRE Associate Director, Large Format Retail, Ryan Arrowsmith said Melbourne’s A-grade large format retail complexes remained in demand with occupancy levels averaging 90% and many centres still fully leased.
“Victoria’s large format sector has been performing very differently to other retail asset classes,” Mr Arrowsmith said.
“We’re seeing particularly strong demand for sites that can be accessed externally, allowing customers to park outside and have minimal contact. Sales continue to be heavily weighted to retailers who have the capability to offer ‘click and collect’ – again, allowing customers to have as little contact as possible.”
The trend is not limited to Victoria, with Australians spending more time at home having spurred a spending spree for related retail goods such as home hardware, electrical products and recreation goods (sporting equipment). In the six months to June-20, these three categories saw trading levels 32%, 16% and 24% respectively above pre- COVID levels.
The positive momentum in non-discretionary retail trade looks set to have continued through the September quarter, with July and August preliminary data indicating an ongoing trend bolstered by the government’s extension to JobKeeper and various additional fiscal measures.
In the latest Victorian commitments, JB Hi-Fi has committed to a five-year lease over a 2,100sqm Chadstone Homemaker tenancy while Chemist Warehouse has leased a 700sqm store for eight years in the same complex.
Sydney Tools and Repco have taken 1,500sqm and 1,300sqm of space respectively – both on seven-year terms – in the Caroline Springs large format retail precinct.
Autobarn has meanwhile committed to 1,000sqm of space in the Lincoln Mills Homemaker Centre on a seven-year term.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
