Developers are thinking outside the box when it comes to large format retail locations, transforming unused ‘sheds’ into lifestyle precincts.
The collapse of Masters has led to multiple big box spaces in need of redevelopment, while the continued success of Bunnings has seen the home improvement retailer abandon stores in favour of even larger sites.
According to the Large Format Retail Association, large format retail—traditionally dominated by furniture and homemaker stores—now makes up more 30 per cent of all retail floor space in Australia.
As more of these spaces become available, developers are transforming the big boxes into lifestyle precincts with restaurants, gyms and supermarkets.
David Mark, leasing director at commercial real estate group Burgess Rawson, said large format retail sites are becoming more attractive to other retailers.
“By capitalising on the properties’ strong attributes such as location, vast footprint, visibility, substantial parking amenity and direct vehicular access, we can attract a strong mix of complementary retailers to these developments,” he said.
Burgess Rawson recently transformed a former Bunnings site in Springvale, Victoria into a new shopping precinct (pictured) anchored by an Aldi supermarket and The Good Guys store.
Mark said the company looked to global trends to secure the right mix of tenants for the site, which will be known as Ouson Plaza. This includes Crunch Fitness, Best Friends Pets, Bottlemart and Paesano restaurant. There are also McDonald’s and Caltex sites adjacent to the plaza.
“From a recent Large Format Retailers Association retail study tour in the US, we discovered many of the large format centres housed both a full line supermarket and large scale gym. Tenant adjacencies such as these offer great benefits to daily customers,” Mark said.
“This strategy enabled us to maximize the site for the Ouson Group and extract a substantial uplift of 128 per cent in net income from its prior use.”
Mark said Bunnings’ continued success in Australia has meant many original stores have been located to larger sites, which presented strong opportunities for development.
“Bunnings warehouses are beginning to outgrow their original sites, which typically unlocks an excellent opportunity to successfully convert them into new mixed-use retail destinations.
“There is significant market potential with the ongoing conversion of the retired stores. These present a number of immediate opportunities to convert otherwise dormant sites into active retail and lifestyle centres.”
Home Consortium, which purchased 61 former Masters centres from Woolworths in 2016, is also taking a new approach to big box spaces. It is reinventing the Masters locations based on local demographics, consumer demand, existing retail supply and planning considerations.
Each Home Consortium centre will be developed around one of three distinct retail offers: daily needs; leisure, lifestyle and education; or homewares and electrical.
Retailers will include Coles, Woolworths and Chemist Warehouse in the daily needs category, Rebel, JB Hi-Fi and Supercheap Auto in leisure, and The Good Guys and Nick Scali Furniture in homewares.
Sign up to the RetailBiz newsletter.