Bulky goods hubs bulk up
THE Baillieu government's changes to Victoria's retail planning laws are beginning to stimulate the bulky goods market, with a bigger range of retailers moving into homemaker centres, a report says.
Woolworths' Masters hardware stores are also driving new development in the sector.
According to CBRE's latest Melbourne Retail MarketView report, furniture was still the biggest category in Melbourne's bulky goods centres in the second quarter, with 28 per cent of tenant space, but this was a drop of 5 per cent from 33 per cent at December 2011.
CBRE bulky goods associate director Chris Parry said the changes to Victorian planning laws by Planning Minister Matthew Guy at the start of the year had taken effect and were driving a greater diversity of uses.
''By relaxing the definition of a bulky goods retailer to allow a broader range of tenants to occupy space within a homemaker centre, the government has provided retailers the opportunity to expand and strengthen the development of new businesses in Victoria,'' Mr Parry said.
Chirnside and Highpoint homemaker centres, which had taken advantage of planning changes to include retailers such as 24-hour gyms and pet stores, maintained full occupancy across the quarter.
CBRE's report also showed about 137,000 square metres of new bulky goods supply should be completed this year. The Masters stores were driving much of this, with five locations in Preston, Oakleigh South, Knoxville, Roxburgh Park and Mornington already completed in the first half of the year. Another four in Tooranga, Carrum Downs, South Morang and Box Hill would follow.
CBRE senior research analyst Erin Obliubek said 2013 was set to be a big year. Major developments would include the 41,000-square-metre IKEA in Campbellfield; the 50,000-square-metre SouthEast homemaker centre in Pakenham; the 32,000 square-metre Millers Road homemaker centre; the 10,000 square-metre Caroline Springs bulky goods and lifestyle centre; and Costco's second store in Ringwood.
On the investment front, the yield range within Melbourne's bulky goods homemaker centres widened over the first half, ranging from 8.25 per cent to 11 per cent, with the indicative yield 9.28 per cent.
''Yields in secondary centres softened a percentage point over the period, as secondary bulky goods centres faced increasing pressure. However, the completion of Springvale homemaker centre resulted in prime yields tightening 25 basis points,'' Ms Obliubek said.
Only one big sale occurred in the first half of 2012; a Bunnings located at Old Geelong Road, Hoppers Crossing, was sold by CBRE in June for $14.6 million on an 8.45 per cent yield to a private investor.