Property manager says bulky goods have staying power, but NAB disagrees

The uptake of online shopping has not dampened demand for rental space from bulky goods retailers in New South Wales, according to property manager Centuria Property Funds.

In recent months, Centuria has renewed or signed new leases for in excess of 11,000 square metres of showroom space to a variety of bulky goods tenants including Harvey Norman, Fantastic Furniture, Pillow Talk and Carpet Call in both metropolitan and regional centres in NSW. 

Centuria attributes the demand for rental space from bulky goods retailers (those selling furniture, whitegoods, bedding and manchester, and electrical equipment) to growth in the sector.

Jason Huljich, CEO of Centuria, says bulky goods has been one of retail’s more resilient sectors over the course of the past 18 months.

“Unlike areas of discretionary retail spending such as clothing, footwear, books and music, which have been increasingly threatened by online, internet-based competition, the bulky goods side of the equation has fared reasonably well,” he says.

According to Huljich, the logistics and cost of shipping a couch or washing machine sourced online from Europe or the US is very different from doing the same thing with clothes or shoes.

“Accordingly, we expect this level of demand for quality rental space to continue and will continue to target opportunities for our portfolio,” he says.

However, Huljich’s positive outlook is at odds with NAB forecasts. In its March 2011 Retail Market Outlook report, respondents to the survey identified bulky good as the weakest retail property sector in all states.

ABS Australian retail trade numbers for April 2011 show a year on year growth rate of 1.1%, equating to annualised retail sales growth of 3.3%.