National retailer Sydney Tools commits to retail space at Chirnside Lifestyle Centre

Limited supply and robust demand drive competitiveness for LFR space in Victoria.

In a move highlighting the ongoing strength of the Large Format Retail (LFR) sector, Sydney Tools secured a 1,200 sqm retail space at the Chirnside Lifestyle Centre, 266 Maroondah Highway, Chirnside Park. This significant leasing transaction, brokered by Large Format Retail Leasing Manager Jake Beckwith from Colliers and Chris Parry, Partner at Leedwell, is a testament to the sector’s resilience and potential.

The property, which was acquired by MLC Asset Management (formerly IOOF) in June 2023, forms part of the 11,100 sqm large format retail project completed in December last year. Chirnside Lifestyle Centre has quickly become a thriving retail hub, hosting iconic brands such as Harris Scarfe Home, Baby Bunting, Super Cheap Auto and Fantastic Furniture, directly adjacent to McDonalds, KFC and Dan Murphys.

The space leased to Sydney Tools was previously occupied by Ashley Furniture under an Australian franchise run by Johnny’s Furniture, which vacated it following the retailer’s collapse earlier this year.

Given the strenght of the current market conditions, the vacancy attracted strong off-market interest from multiple retail brands, highlighting the sector’s ongoing low vacancy rates. The successful lease, resulting in a 20% rental growth, aligns with broader trends observed in the LFR market, where existing buildings are commanding higher rents due to limited supply and robust demand.

“The LFR sector has outperformed other retail segments in recent years, driven by strong population growth, rising housing prices, and evolving tenant compositions. The sector’s constrained supply pipeline, coupled with a robust demand outlook, has resulted in a competitive landscape for readily available spaces,” said Mr Parry.

In Victoria, the LFR sector has experienced remarkable growth, particularly in categories like hardware, building, and garden supplies, which now represent 17.6% of all floor space in large format retail centres, up from 15.2% a few years ago. This upward trend, mirrored in the recent expansion of Sydney Tools, which has now entered the top 30 occupiers by floor space nationally, is a promising sign for the sector’s future.

“From virtually no presence a decade ago, Sydney Tools has strategically expanded and now occupies approximately 40,000 sqm across Australia’s large format retail centres,” added Mr Beckwith.

“Traditional categories, such as hardware and furniture, are now being complemented by a new wave of “lifestyle” retailers, which has broadened the users committing to LFR centres. Retailers are also transitioning from shopping centres to LFR spaces attracted by larger footprints, extended trading hours, and competitive rental rates.”

The shift towards lifestyle offerings signals a change in consumer behaviour, with LFR centres becoming increasingly important destinations for everyday shopping needs. This trend is expected to continue, supported by strong long-term growth drivers, including population increases and housing demand.

Mr Parry continued, “Sydney Tools’ new lease at Chirnside Park is a prime example of how well- positioned properties in the LFR sector can capitalise on these favourable market conditions. The transaction underscores the importance of strategic location and tenant mix in driving rental growth and investor returns.”