By Lorna Brett

Research conducted by CB Richard Ellis is tipping a slow recovery for bulky goods sector after a very poor first-half, with new bulky good centre developments and centre extensions planned in most major Australian cities during the coming year.

Bulky goods retailing includes whitegoods, electrical equipment, bedding and manchester, furniture, lighting and automotive parts, amongst others.

According to CBRE’s Pacific Region Bulky Goods Centres MarketView Report, the bulky goods sector was the hardest hit of any retail property sub-type since the peak investment cycle during 2007; but appears to be making a slow recovery largely due to an increase in the population and lower unemployment rates.

Investment in centres returns, slowly

The report shows that nine bulky goods projects are due to be completed in Sydney by the end of 2010, creating over 80,000 square metres of new space. This includes the opening of HomeHQ in Artarmon (23,000 square metres) and the extension of the Moore Park Supa Centa (5000 square metres).
During 2011, Sydney should see the addition of a further 61,000 square metres of new bulky goods space be created.

CBRE does not see Melbourne performing as strongly as Sydney in 2010, with a number of projects amounting to 99,000 square metres of new bulky goods space having been deferred over the past 12 months, due to remain deferred. The only centre that appears on track to open by the close of this year is the 30,000 square metre centre in Chadstone.

According to CBRE, 2011/2012 should see developer confidence return more strongly in Victoria, with a 70,000 square metre Harvey Norman and Ikea anchored centre planned in Springvale for 2012 representing just one of the projects to be completed during the period.

Site demand increasing

CBRA noted a significant rise in demand for bulky goods-zoned sites, which it attributes to Woolworths’ foray into the hardware segment; as the retailer looks to fill its 150-store requirement over the next five years.

CBRE warns that although the bulky goods sector looks to be making a sluggish recovery “population increases and underlying demand for residential housing should continue to underpin the growth in household goods expenditure.”

“Rising interest rates are likely to stifle recovery in housing construction and this will be a future challenge to the bulky goods sector,” CBRE said.