Bulky goods revival continues as Harvey Norman Maroochydore centre now 91% leased

The $130 million Harvey Norman Maroochydore Homemaker Centre on the Sunshine Coast, which opened in November last year, is now 91% leased as demand for bulky good retail assets rises. 

The success of the centre, the first homemaker complex built in Queensland since 2009, will be seen as a sign of a return of confidence in both the South East Queensland commercial property market and the residential property market with furniture and home living stores prominent among tenants.

The successful leasing of the centre comes on the back of a pick-up in the bulky goods sector spurred on by competition between Wesfarmer’s Bunnings and Woolworth’s Masters for the DIY space and Costco and IKEA both expanding in Australia. 

The 2012 shopping centre investment review report from Jones Lang LaSalle says activity in the sub-regional and bulky goods sectors increased in 2012 with opportunistic investors emerging to capitalise on wide yield spreads including those offered in the bulky goods sector.

The JLL report says there was a “significant revival in activity” in the bulky goods sector in 2012 with over $613.2 million worth of bulky goods (homemaker) centres traded in 2012, 87% above the 10-year average ($328 million). 

Yields have been high with the Home Hub Hills bulky good centre in Castle Hill, Sydney purchased by LIM last year on a yield of 9.32%. 

“This sector has been attractive for a number of reasons. 

“The investors targeting this asset class recognise that the prime assets have stabilised and a recovery in retail spending, combined with a potential revival in residential construction, could strengthen the performance of prime centres. 

“In addition, there has been relatively low competition for these assets with the absence of A-REIT’s as active buyers and centres can be acquired on attractive yields,” says JLL. 

A-REITs continue to exit this sector as evidenced by Charter Hall’s sale of Mile End Homemaker Centre ($43.8 million) and GPT’s sale of Homemaker City Jindalee ($50.5 million) and Homemaker City Aspley ($41.2 million). 

The 32,000 square metres of lettable area in the Maroochydore Centre includes 20 retail stores and 4,185 square metres of office space, more than half of which is leased to Goodlife Health Club. 

Just four tenancies remain in the bulky goods store measuring 125 square metres, 510 square metres, 515 square metres and 1,320 square metres. 

The indoor centre was developed and is anchor-tenanted by Harvey Norman. 

Other tenants include Joyce Mayne, Domayne, Nick Scali, Plush, Next Byte, The Outdoor Furniture Specialists, Akasha, Sleepy’s, 2 Garnish and Global Living Furniture. 

The leasing agents for the centre are CBRE’s Damian Crocetti and colleague Nick Willis. 

Crocetti says the centre is well positioned to take full advantage of the ‘Homemaker Market Boom’ with bulky goods spending in the catchment area totaling an estimated $1.029 billion according to Deep End Services. 

The complex is situated just 1km west of the Maroochydore CBD and only moments from proposed Bunnings and Masters sites. 

It is adjacent to the largest shopping centre on the Sunshine Coast, the Best & Less, Coles, Kmart, Myer and Target anchored Sunshine Plaza.