Big shake-up for the Coast's commercial leasing landscape
WHEN one enormous door closes, another one opens.
The 32,000sqm Maroochydore Homemaker Centre opened last November and caused ripples of worry about the enormous hole it could leave in the region's commercial leasing marketplace.
All of a sudden, thousands of square metres of bulky goods retail space lay empty as big-name businesses like Harvey Norman, Joyce Mayne, Global Living Furniture and Sleepy's all moved into shiny new digs on Maroochy Blvd.
But already, just two months on, there are firm assurances the bigger vacancies will be filled in the first quarter of this year or existing leases will be maintained, quashing any fears of a letting crisis.
CBRE handles leasing in the new centre as well as the Bunnings-led Sunshine Homemaker Centre on Maroochydore Rd, which has surrendered three tenants to the new, bigger complex.
"I have been in negotiations with tenants for several months and it looks like we've locked in deals on all those vacant spaces with both new and existing tenants that are expanding," Brendan Robins said.
"One is expanding and the other one is a brand new tenant to Maroochydore, which will be a good foot traffic generator for the centre.
"So this has created opportunities for other retailers to come into the market.
"We've still got surplus demand. I got an email from a client who wants 2000sqm in that Bunnings centre right now, but we can't get them in there."
Mr Robins said the Sunshine Homemaker Centre vacancies created by the departure of Harvey Norman and Sleepy's would be full in the next two months.
"Everyone was sitting there saying these could be vacant for years, but we will fill them back up straight away and we'll have a completely full centre.
"My colleague Tori Dodd is handling Global Living on Evans St and she also has a very strong potential lessee that could be taking that space. She's had several meetings and inspections, so hopefully that will disappear soon."
Mr Robins said the new centre added 30% more bulky goods floor space to the 100,000sqm previously available on the Coast, which took in Home Central Kawana, Sunshine Homemaker, The Zone and Nicklin Way.
"I think long term it represents a confidence in the growth of the Sunshine Coast, because people only ever build retail space when they can see growth in an area and retail demand for that space.
"We've noticed an upswing since August, September last year and a lot of our retailers are saying things have picked up. So hopefully, with a lower interest-rate environment and a steadying in jobs, there will be a bit more confidence coming back in the market."
The lease on Joyce Mayne's Aerodrome Rd property does not run out until 2015. Leasing agent Ken Hindmarsh said he had been asked to find a replacement tenant.
"We're dealing with a number of parties at the moment and there seems to be quite a few that don't want all of the space, so we're looking at the potential of dividing it.
"There is more interest in it as a retail space, but broken up into smaller areas."
Mr Hindmarsh said he had seen similarly large shopping centre developments burst onto the Coast retail scene in the past.
"If you look back at Maroochydore's history, there have been equivalent types of development that has shaken things for a while.
"When Sunshine Plaza first opened, for a few years it didn't seem to be going that well, and there was a lot of talk about tenants getting dragged out of the CBD, which was Ocean St.
"But these things are part of the evolution of the area and we have to take them in our stride."
Colliers International senior executive Tony Justo is handling the old Harvey Norman site at the top of Nicklin Way at Minyama. That lease does not expire until the end of 2013 and is currently being used by Harvey Norman as a storage site.
"We haven't marketed it but we're in discussions with a number of tenants to go in there, and we've got adequate time in terms of filling that gap in."
He said the overall A-grade retail vacancy rate was quite low.
"You see a lot (of vacancies) on Aerodrome Rd, Ocean St, Evans St and the Big Top but they are B-grade sites compared to places like Mooloolaba Esplanade. I don't think there's an oversupply.
"I think there's a shift and retailers recognise there are two areas they want to be in: Nicklin Way has the strongest pull, and (the new) Harvey Norman second.
"You don't get a vacancy on Nicklin Way that lasts; and the old Harvey Norman site will fill quite quickly because it draws more traffic than Maroochy Blvd. Nicklin Way gets 70,000 cars a day."
Savills agent Hayley Donnelly was also hopeful of filling three units of office space totalling 1320sqm on the top floor of the new homemaker centre.
NEW FOR OLD
TENANCIES created by Maroochydore Homemaker Centre:
Global Living Furniture, formerly at Evans St Maroochydore
Harvey Norman, Nicklin Way Minyama
Harvey Norman flooring, Sunshine Homemaker Centre
Harvey Norman electrical, Sunshine Homemaker Centre
Joyce Mayne, Aerodrome Rd
Sleepy's, Sunshine Homemaker Centre
Outdoor Furniture Specialists, Wises Rd
Rugs A Million, Plaza Pde.