A flurry of recent renovation activity across Australia continues to bolster the large format sector, with a range of retailers expected to benefit from sales growth over the medium term.
With house prices remaining high in most capital cities across the country, particularly on the east coast, renovations are emerging as a more cost effective way for owners and buyers to upgrade their properties.
CBRE’s Head of Large Format Retail, Chris Parry, said as house prices continue to rise, so will renovation expenditure, which is particularly beneficial to hardware and household goods retailing.
“Increasing renovations are ensuring ongoing sales growth across the large format sector, with a broad range of retailers expected to be positively impacted - from hardware stores and lighting specialists, to furniture, bedding and homewares retailers.”
“With the household goods sector representing a key fundamental for large format retail, we expect the sales growth will in turn benefit rents and centre performance,” Mr Parry said.
According to CBRE’s Q3 Retail Marketview report, household goods retailing continued to experience growth over the year to August 2016, with a 1.4% increase experienced over the period.
Mr Parry said although this growth wasn’t as strong as what was witnessed in the previous year, it represented a more normalised and sustainable rate for the market.
“The sales growth of the period is expected to continue, with household goods retailers continuing to show confidence in the sector.”
This trend is exemplified by the number of household goods retailers who are expanding across Australia, including Koala & Tree which has established a new showroom in Maribyrnong Homemaker Centre and Beacon Lighting’s recent lease at Bell Street Showrooms in Preston.
“Despite some industry speculation that house prices would fall over the year, they have continued to remain at high rates and we expect the large format sector to continue benefiting from increased renovations over the medium term,” Mr Parry said.
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