Proposed changes to planning laws will radically alter Victoria's retail landscape, according to the Australian Property Institute.
The Victorian government is set to revise nine existing residential and business zones and replace them with five broad zones after a ministerial advisory committee submitted findings in February.
The changes are likely to benefit bulky goods retailers and supermarkets most, according to the institute's Retail Property Update.
Business 3 and 4 zones will be collapsed into the business 2 zone, under the new laws.
"The area on which bulky goods development is of right within metropolitan Melbourne will effectively increase six-fold, from 355 hectares at present to 2206 hectares," the institute says.
That will boost retailers such as Aldi, Costco and Masters but is also likely to have a negative impact on land values.
"By significantly broadening retail development options and diminishing the scarcity value of existing retail land, the proposed changes can be expected to result in a recalibration of land values," it said.
The removal of the floor-space cap at principal activities centres will help large shopping centres such as Chadstone expand even further, it suggests.
It will potentially allow a transformation of existing bulky goods centres into US-style mega centres that incorporate large format fashion, footwear and accessory retailers.
The changes are also likely to encourage development of small-format supermarkets with a floor area less than 2000 square metres. They will become as of right participants in industrial 3 zoned land.
Victoria's specialised food retailers (butchers, bakers, delicatessens and greengrocers) as well as furniture, floor and homewares stores have borne the brunt of the post-GFC contraction in consumer spending, the institute said.
"Vacancy to date [has been] largely focused in retail strips and smaller neighbourhood centres, while regional centres maintain near full occupancy," the update said.
A recent pick-up in consumer confidence suggested a spending recovery in the months ahead but households were still focused on reducing debt. That was "likely to temper spending growth and maintain consumer focus on extracting value for money," it said.