THE local bulky goods business is entering a consolidation phase after a three-year period of sustained growth, according to industry analysts.
THE local bulky goods business is entering a consolidation phase after a three-year period of sustained growth, according to industry analysts.
The latest market research from CB Richard Ellis shows the bulky goods market has gathered steam during the past few years, with population gains driving the need for larger centres, particularly in the southern corridor.
Bulky goods retailers include furniture stores, electronics and white goods retailers, hardware, outdoor and adventure supply stores.
Last year, 142,000 square metres of bulky goods showroom space entered the market, and a further 18,000sqm is under construction, although the supply pipeline beyond this year is uncertain, according to the CBRE statistics.
Leasing agents Burgess Rawson director Cameron Hopkins said South Central, on Armadale Road, Jandakot, would become Perth’s largest bulky goods centre after completion of stage two later this year.
The CBRE research indicated tenant demand for bulky goods showrooms would remain steady, with several national brand name retailers looking for expansion space in Western Australia.
Lease Equity managing director Jim Tsagalis said there had been a consolidation in bulky goods in 2009, after a three-year period of sustained high growth in the sector.
“There’s been a consolidation in bulky goods, bulky goods have been the darling of retail property as far as their exponential growth, and the investment spending in those areas of property goes,” Mr Tsagalis told WA Business News.
“Having said that, the past 12 months has probably been a bit flat, because a lot of growth into the Perth market was in terms of new players.
“That will continue, but at a decelerated rate. It’s coming off a huge growth base, so in relative terms I don’t think it’s going to grow as much as it did, in absolute terms it will grow, but in relative terms, not as greatly.”
Leasing agents Savills WA head of research, Helen Swanson, said the growth of the bulky goods market was operating in direct correlation with residential property, and was also expecting a slowdown of growth.
“If there are more first homebuyers out there and they’re buying more houses, they’re going to places like Harvey Norman, so there’s a direct correlation between the two,” Ms Swanson said.
“How the residential market goes, long-term, fundamentally it looks good, but with the first homeowner’s grant coming off and interest rates rising I wouldn’t expect immediate growth in bulky goods.”
Mr Hopkins said the bulky goods industry in WA continued to mature and was likely to undergo further growth as retailers understood the benefits of locating in bulky goods centres or precincts.
