Bulky goods retailing is starting to show some green shoots, albeit slowly, as investors look to buy the assets and remix the offerings.
One trigger has been the rise in new home sales for the fourth straight month, up by 3.4 per cent in June. Detached house sales rose by 7.3 per cent but multi-unit sales fell by 17.5 per cent.
These gains provide and impetus for consumers to buy new soft furnishings and bulky whitegoods.
As home affordability also improves and interest rates fall, home buyers and occupiers also feel more confident to upgrade with a new couch, bedding and other furniture.
Chief economist at CommSec Craig James said housing had more significant multiplier effects across the Australian economy than the mining sector, so stronger construction and purchase activity will be important in providing fresh momentum to economic growth.
The latest property deal was the sale by Charter Hall of Home HQ Nunawading for $48 million.
Home HQ Nunawading has three anchors, Nick Scali Furniture, The Good Guys and Bev Marks Beds, together with 17 major retailers including Sony Centre, Howards Storage World, JB Hi-Fi, Lincraft and South Pacific Health Club.
According to the Australian head of retail investments at Jones Lang LaSalle, Simon Rooney, many major institutions have been reducing their exposure to "non-core" retail assets - particularly in the bulky goods sector.
"Since 2007, institutional landlords have disposed of over $1.15 billion of homemaker centres in 39 separate transactions," he said. "Private investors have been the most active buyers, and have accounted for almost half of all deals since 2007 [47 per cent], followed by unlisted funds at just 23 per cent.
The associate director of Bulky Goods at CBRE, Chris Parry, said these niche group of investors were driving activity.
"These investors are seeing the asset class as undervalued due to the significant spread between yields and funding, which will only last for a limited time," he said.
Nationally, construction of traditional, multi-tenanted bulky goods centres has slowed, which offered opportunities for landlords to diversify their retail mix or backfill existing vacancies.
"Victoria will account for over 50 per cent of new construction, with 270,000 sq m of bulky goods space due to be developed in the state in 2013," Mr Parry said.
"There has been a slight downward pressure on bulky goods rent nationally, however, with increased competition between several major local players and also international giants such as Costco and Ikea, who are both expanding in Australia, rents are beginning to stabilise."