MASTERS REBORN: Empty buildings about to be resurrected
ELEVEN months after the collapse of Masters, nearly $1 billion has been spent transforming the "tumbleweeds" into a major new retail player taking the fight to the shopping centres.
Home Consortium, founded by former UBS investment banker David Di Pilla and backed by a group of wealthy families, last year spent around $725 million buying up 61 former Masters sites from Woolworths.
Since then, another $250 million has been spent transforming 40 of those sites into large-format warehouse-style shopping centres, with major retailers including Coles, Woolworths, Chemist Warehouse, JB Hi-Fi, Nick Scali and Toys 'R' Us piling in.
"Home Consortium is a great news story," Mr Di Pilla said. "We had Masters closing down at the end of 2016, lots of empty centres, people out of work, tumbleweeds.
"Inside of 11 months (there is) a vibrant new retail entrant into the market in Australia. One quarter of a billion dollars in capital is being spent, positioned in some of the best growth corridors in the country, we estimate over 5000 new jobs."
Eight of the former sites have already opened at Marsden Park, Penrith and Rutherford in NSW, Pakenham and South Morang in Victoria, and Toowomba, North Lakes and Tingalpa in Queensland. A further two will open before Christmas, one in Joondalup, WA, and one in Ballarat, Victoria.
Mr Di Pilla said Home Consortium would have 30 centres up and running by the end of next year.
"They're in prime locations, highly visible, 400 car parks on average, really convenient, easy access, best brand retailers all under one roof, great amenities, great facilities, fully airconditioned," he said. "And the most important thing is we're delivering at very competitive rents."
According to retail analyst Geoff Dart, Home Consortium's "hypermarket" format is set to put the squeeze on the major shopping centre operators like Westfield and Mirvac, which he described as "generally in denial".
"The reason retailers are now looking at hypermarkets is you can move into a (Home Consortium) for roughly something like $200 per square metre compared to a shopping centre at $600 per square metre," he said earlier this year.
"The retailers are saying, 'We've got the brand, the people come to where the brand is.' Staff and rent are the two key costs, if you can't control your rent your margins go south and your profit goes south."
Home Consortium's 38 retailers are categorised under daily needs - Coles, Woolworths and Chemist Warehouse - homewares and electrical, with the likes of Bing Lee, Amart Furniture and Spotlight, and leisure and lifestyle, encompassing Anaconda, BCF and Rebel, among others.
"That's overlaid with a very significant amount of service offerings," Mr Di Pilla said. "Early learning childcare centres, medical centres, gyms, kids play centres, cafes, all of which come under one roof to create a vibrant, community-based offering close to their customers."
He described the early feedback to the centres, the first of which opened last month, as "very, very positive".
"It's already resonating," he said.
Mr Di Pilla has dismissed the threat of Amazon, arguing retailers in the household goods and services categories will not be as exposed to the threat of online retailing as traditional department stores.
"Amazon, as far as we're concerned, is part of the landscape now," he said. "Our business is very different. We're a completely different segment of the market. Our overall proposition is convenience-based, value-for-money retailing.
"When you talk about Amazon, what's Amazon about? It's about the retail environment becoming more competitive in Australia. We think retailers are looking to offer a value-for-money and convenience-based proposition to their customers.
"That's why half a million square metres of real estate and available floorspace (has been) let up so quickly. We're basically 80 per cent let up. We believe this is the biggest rollout of internal mall convenience retailing in one go in Australian history."