A growing number of large format retailers are expanding their horizons and pursuing interstate expansion strategies, according to a new market review from CBRE.
Pillow Talk, Kitchen Warehouse, Koala Tree and Living, Provincial Home Living and Focus on Furniture are among a growing band of large format retailers expanding their footprint as household goods sales continue to surge.
CBRE’s Australian head of large format retail, Chris Parry, said the demand for space has pushed large format retail vacancy rates down significantly, particularly in Sydney, where the vacancy rate has fallen from 17 percent two years ago to less than four percent in Q2 2015.
“We’re seeing a trend for retailers who have a strong network in one or more states actively seeking to expand their national footprint, with a particular focus on the Eastern Seaboard,” Mr Parry said.
“Stronger trading conditions are supporting this push, with national household goods sales having performed exceptionally well, increasing by 8.6 percent over the 12 months to May 2015.”
Victorian large format retailer, Provincial Home Living, secured its first South Australian store at Mile End and NSW store at Albury as well as opening a store at Homebush DFO.
Focus on Furniture also expanded into SA to add to its existing network of stores Victoria. The group is now seeking further opportunities for the network in metropolitan NSW.
Victorian-based furniture retailer Koala Tree and Living is another group with interstate expansion on the agenda, with a NSW store site under negotiation following an introduction from CBRE’s Victorian large format team.
Queensland based home linen specialist Pillow Talk is on the expansion trail, having recently secured three Victorian sites at Shepparton, Mentone and Bendigo.
Kitchen Warehouse has interstate ambitions, having committed to a first Queensland store to add to its seven existing outlets on the west coast. Further eastern seaboard opportunities are being explored.
“CBRE’s strong national presence has been of considerable benefit in facilitating these interstate expansion strategies,” Mr Parry said, adding that it was currently a demand driven market.