This article is from the Australian Property Journal archive
A CLOSED plastic moulding manufacturing plant used for Toyota, Ford and GMH vehicles will make way for a $50 million-plus homemaker centre anchored by Harvey Norman, and will be jointly developed by the major electronics, furniture and whitegoods retailer which posted a fall in full-year profit.
Harvey Norman has teamed up with MHG on the new Melton Homemaker Centre, to be built on the 50,000 sqm site at 2290-2296 Melton Highway in Melbourne’s outer west.
Harvey Norman has acquired 23,500 sqm of the site and will add to its $4 billion dollar owned property portfolio, while a range of retailers, including Fantastic Furniture, National Tiles, Pillow Talk, Rug Galaxy and other national retailers will take up 18,000 sqm in the large format retail centre.
Family-owned MHG acquired the Melton site in 1996 to operate a plant featuring state-of-the-art robotic painting, plastic extrusion and injection moulding manufacturing facility to support Toyota, Ford and GMH. The plant closed in 2021.
MHG established the Melton Gateway Centre on another area of the site in 2007, featuring tenants including Woolworths Petrol, McDonald’s, Chemist Warehouse, The Good Guys, Dulux, Best Friends Pets and Subway, in 2007.
Chairman of MHG, Steve Haritos, said “We believe there will be very strong demand for the goods and services to be delivered at the new centre, as evidenced by the interest of major national retail tenants”.
The centre will also feature 504 car spaces and 66 bicycle spaces.
A ground-breaking ceremony on the site was held this week with representatives of MHG, Harvey Norman and Melton City Council in attendance.
Victorian builder H. Troon Pty Ltd has started work on the site and expects to complete the project in mid-2024.
A representative of Harvey Norman, said “We are very excited to be developing this homemaker centre for Melton, with our research showing there is very strong demand from families in the area for electrical appliances, furnishings and other items for people’s homes and apartments”.
Harvey Norman acquired the Watergardens Homeplace – which it part occupies – in Melbourne’s north west two years ago for $97 million, and the Geraldton Homemaker Centre in Western Australia for more than $28 million, as it became apparent that the large-format retail sector offered resilience during the pandemic.
Harvey Norman profit slides, cost-of-living pressures bite sales
Harvey Norman posted a pre-tax profit of $776.08 million excluding property revaluations for FY23, a fall of 31.9%.
Cost-of-living pressures are keeping shoppers’ wallets shut and sales in July across its Australian franchisees were down 12.3%, by 2.6% in New Zealand and by nearly 20% in Northern Ireland. Slovenia and Croatia was down 2.6%, Ireland by 2.1%, and Singapore by 1.7%, while Malaysia was up 0.6%.
Harvey Norman will stay the course on its ambitions to grow to 80 stores in Malaysia by the end of 2028. On the way, it intends to hit 50 stores by the end of June 2025, making it the largest store network outside Australia.
Harvey Norman’s property portfolio grew by $253.38 million, largely due to $120.2 million in net property revaluation increments.
“The marginal increase in property fair value for 2H23 is in contrast to the revaluation results of other listed real estate investment trusts (REITs). This contrast is due to the assets held by the consolidated entity being in a different asset class to assets held by other REITs that hold assets such as offices or traditional retail shopping centres. Unlike these other asset classes, the large-format retail property sector continues to experience strong tenant demand and historically high occupancy rates resulting in solid rental growth.”