Millennials Drive Robust Retail Markets

A heritage industrial shed that received an award-winning adaptive reuse to transform it into a large format retail hub is on the block in a well-heeled part of Sydney.

The Artarmon Home HQ is a 23,045sq m shopping centre in Sydney’s Lower North Shore, anchored by The Good Guys and Freedom, as well as JB HI-Fi and Oz Design Furniture. 

The 2010 adaptive reuse and redesign has been complemented by a recent expansion to provide a food and beverage offering on the site. 

Large format retail has been a strong performer in retail during the past few years. 

McVay Real Estate’s Sam McVay said the shopping centre was just one of three large format retail centres within 10km of the Sydney CBD, which McVay said meant it captured about 13 per cent of the metropolitan trade area. 

“Home HQ (main image) is in the perfect location. It is the only large format retail centre in one of Australia’s most affluent trade areas, which is experiencing diminishing levels of large format retail (LFR) supply,” McVay said.

“The centre is positioned for strong future LFR performance, all whilst alternative use feasibilities improve.

“Only 17 per cent of national LFR centre sales in the past five years were within 10km of a major CBD, and there has only been one centre sold within 10km of the Sydney CBD in the past five years.”

McVay said while there were no comparable transactions in this area, it would be a “sought after” asset. The centre has a 97 per cent occupancy and a 4.7-year weighted average lease expiry.

▲ Pelligra Group’s 85 Spring Street in Melbourne’s East End.

Meanwhile, fine dining and luxury retail continue to perform well, driven by cashed-up millennials, according to Colliers research.

This year 13 new high-end restaurants have already opened in Sydney’s CBD and fringe, while Melbourne has welcomed nine new premium dining experiences in the CBD and metro, and a further four venues were expected to open their doors in each city in the coming months. 

Colliers retail leasing director Adam Lester said landlords were repositioning assets to capture this market. 

“Fine dining food and beverage is currently Melbourne’s highest performing retail sector, with a surge in enquiry for high-end hospitality options within commercial buildings,” Lester said. 

“We are currently experiencing a high volume of requests from landlords seeking more premium brands to occupy their spaces, as well as premium restaurateurs looking for flagship opportunities within the city.”

Three floors of Pelligra Group’s reinivigorated commercial asset at 85 Spring Street are being leased out after the developer acquired the site mid-2022.

It is being offered as a 1500sq m premium hospitality space across three levels in the fully refurbished commercial building in Melbourne’s East End. 

The property is surrounded by several significant projects, including the state-of-the-art Wesley Place office precinct by Charter Hall and the new 5-star flagship Shangri La Hotel at Sapphire by the Gardens.