- Dexus purchased a stake in the centre in 2019
- Sector tailwinds have followed lockdowns and travel bans
- Spending remains well above pre-pandemic levels
Large format retail, Homemaker Prospect, has been sold to AsheMorgan for $78.9 million.
Dexus acquired a stake in the property in 2019 for $64.2 million, with the Prospect Homemaker spanning 26,000 square metres, 28 showrooms, and featuring iconic Australian brands including Fantastic Furniture, The Good Guys, Snooze, Beacon Lighting, and Bing Lee.
AsheMorgan is experienced in the sector and sold Sydney’s Crossroads Homemaker Centre in October to LaSalle Investment Management for $282 million, making it double the $140 million paid for the property in 2018.
“Of the five largest retail transactions completed in Australia in 2022 three have been Large Format Retail assets,” said JLL’s Nick Willis.
“These have included more recently the sale of Crossroads Homemaker ($282 million), Homeworld Helensvale ($265 million) and Alexandria Homemaker ($200 million) sold to Goodman for last mile conversion. The sale of Prospect Homemaker takes the total LFR sales volume for 2022 to a five-year high and reflects the intensified demand for LFR assets because of the category’s resilience over the past two years.”
“The Large Format Retail sub-sector performed exceptionally well recording the most significant yield compression across all retail sub-sectors in 2020 and 2021 with yields tightening by 105 basis points between the end of 2019 and the final quarter of 2021,” said JLL’s Sam Hatcher.
The demand for household goods is providing strong tailwinds for the sector, JLL Research found that pandemic-induced lockdowns and travel bans created the tailwinds with household goods spending at 31 per cent above pre-pandemic levels.
Home renovations and work from home has also seen spending in the sector increase sharply.
“Pandemic-induced lockdowns and travel bans served as a significant tailwind for the LFR sector as household goods spending remains elevated at 31% above pre-pandemic levels,” said JLL’s Head of Capital Markets Research, Andrew Quillfeldt.
“The acceleration in spending was primarily driven by strong renovation activity and a sharp increase in demand for home office furniture and equipment with consumers spending almost $1.4 billion more a month than pre-pandemic.”
“Given strong consumer spending in the sub-sector, leasing demand has remained robust. Major LFR retailers have continued to remain optimistic with NCK expecting to open a minimum of six new stores nationally in FY23; two Nick Scali stores and four Plush stores,” said Mr Quillfeldt.
