Bunnings and Masters have left multiple large-format retail sheds in their wake. Here’s what really drives them out — and who’s racing to move in.

Drive through Australia’s outer suburbs and you’ll pass one: a huge green shed, or a beige one, sometimes red, with a car park built for a footy crowd.

Today’s gym may have sold decking timber a decade ago. A discount store might once have been a hardware megastore — and before that, something else entirely. These buildings never get demolished, just passed on and relabelled.

Take Panda Mart, the international mega-discount chain dubbed ‘Temu in real life’ that now has three stores in Australia. In March 2025, it opened its first on an old Masters site in Cranbourne — to a 1,000-strong crowd so raucous police were called in.

It launched its second in an 8,300sqm former Bunnings in Melbourne’s Preston in September 2025, while a third location took over a Bunnings shed in Rocklea, Brisbane, in August 2026.

When Masters collapsed in 2016 — after Woolworths’ failed bid to break Bunnings’ grip on hardware — the market was flooded with sheds; Charter Hall alone bought six for $187m, leasing them straight back to Bunnings. And as Bunnings keeps upgrading to bigger stores, it leaves fresh vacancies in its wake.

Some have become shopping centres, others mixed-use residential developments. One in West Gosford on the NSW Central Coast briefly became a classic car museum. So why all this movement — and who’s next in line to pounce on the next wave of vacant sheds?

Why retailers move

In most cases, it isn’t retreat — usually the opposite, says Ray White Commercial CEO Julie Ryan. When Bunnings closed its Preston store, it wasn’t pulling out; it opened a $59m rebuild nearby, freeing the old shed for Panda Mart.

“Big-box retail is highly successful in Australia, so vacancies usually appear when a retailer moves to a superior location,” she said.

Retail historian Matthew Bailey says there are usually overlapping drivers, such as changes in the surrounding demographic, growth strategy or a small store outgrowing itself. Bunnings is a prime example.

Established footprint, parking and consumer familiarity can make leasing former Bunnings attractive. Picture: Ray White Commercial

“It developed a lot of smaller ‘home centres’, which helped establish a footprint in any given area, and probably led to the demise of surrounding competing hardware stores. The firm later turned these into large footprint ‘warehouse’ stores,” he said.

Will Goldsworthy, Director of Large Format Retail Leasing at Colliers, says retailers are often leaving the site, not the catchment.

“They are looking to better position their stores to service their existing customer base, whether that means a larger footprint, improved accessibility, or a location that better suits their operating model.”

What makes a good large-format retail site?

According to Ms Ryan, developed or brownfield sites beat empty or greenfield land, hands down; repurposing is far cheaper and faster than building from scratch.

Plus you typically inherit road access, parking, an established population, and zoning that already supports retail.

So why does one ex-Bunnings get snapped up in months (like Preston, taken by Panda Mart) while another sits empty for years (like Cairns, vacant for five years before becoming a pop-up basketball arena)?

Sometimes it’s speed of match. One fast transaction was the former Bunnings at Underwood near Brisbane, taken whole by Area 51 to create a 10,000sqm entertainment centre.

Brownfield sites such as former Bunnings can be more popular for new businesses to move in than greenfield sites. Picture: Ray White Commercial

Other times a site is deliberately land-banked, says Ms Ryan.

“An example of this is the clever purchase of a large number of Masters sites by the Spotlight Group.”

Spotlight bought them not to trade immediately, but to hold — for future use, for another of its brands, or simply as an appreciating asset.

Demand increasing as supply remains tight

With big-box sites scarce — especially in metro markets — landbanking can be lucrative. Demand far outpaces supply, with Ray White Commercial putting vacancy rates in this sector at just 1.5–3% nationally.

New sites are hard to make feasible given construction costs, Ms Ryan says, so tenants tend to be “sticky” — preferring long leases and staying put once a centre gets the basics right.

Panda Mart now occupies the former Bunnings warehouse in Preston, keeping some of the hardware store’s livery. Picture: Supplied

Large-format retail is also unusually resilient, since many people still prefer to see before they buy sight unseen.

That scarcity bites hardest for international newcomers like Costco and Panda Mart.

Mr Bailey says securing sites in Australia is “a highly competitive and complex process” due to rigorous planning legislation — Aldi struggled for years, with Coles and Woolworths having locked up the best sites almost everywhere, and only found a way in by leasing inside shopping centres, letting the centres handle zoning and approvals.

Use of large retail sheds evolving

A decade on from Masters’ collapse, most of its 63 sites have been absorbed — by HomeCo, Spotlight, Bunnings and now Panda Mart. But what moves in next is changing.

As big-box retailers upgrade and relocate, they’re freeing up space for a broader mix of tenants, says Mr Goldsworthy — not just furniture, bedding and discount retailers, but increasingly health, wellness and indoor recreation.

“These operators can take advantage of the scale of large-format buildings without necessarily needing to undertake a completely new development.”

Revo Fitness took over Masters’ very first site in Braybrook, Melbourne. BCF also occupied the space for a time. Picture: Revo Fitness Facebook

Take Area 51’s takeover of the old Bunnings at Underwood, and Masters’ very first Australian store in Braybrook, in Melbourne’s west, now a Home Co centre housing a Revo Fitness gym.

“The broader trend is that these buildings are becoming increasingly adaptable,” Mr Goldsworthy said. “Rather than simply replacing one large-format retailer with another, we’re seeing a wider range of retail, entertainment, recreation and service uses finding ways to make these large footprints work.”

Another decade from now, these sheds could be almost anything.

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Cult discount giant Kmart is launching a stand-alone store format aimed at winning budget-conscious Australian households from Ikea, Amart and Freedom.

The Wesfarmers-owned powerhouse will open its first K Home showroom at Box Hill South in Melbourne’s east on June 18, with most products in the store not available from regular Kmart outlets.

The store will focus on furniture and homewares in a showroom-style format, with curated displays and room-based inspiration designed to help shoppers furnish their homes without paying premium prices.
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Kmart chief commercial officer Callum Smith said the trial would help the retailer bring more of its home range into stores.

“K Home at Box Hill South gives us the opportunity to bring more of our home range into store and better understand how customers want to shop it,” Mr Smith said.

“The space has been designed differently from a traditional Kmart store, with a more immersive home environment, curated displays and room-based inspiration to help customers explore the range in a more intuitive way.

“Customers have embraced Kmart’s home range for many years, and we’ve continued to grow our furniture offer as customer demand has grown.”

Kmart’s K Home concept will bring more furniture and larger homewares into a physical store, with many products not available from regular Kmart outlets. Picture: Kmart

Mr Smith said affordability was central to the new concept.

“At a time when value matters more than ever, this trial is about helping Australian families create a home they love at a price they can afford,” he said.

Colliers commercial agent Jake Beckwith said K Home was more likely to compete with Ikea, Amart and Freedom than Spotlight.

“I wouldn’t put Spotlight in there because they’re more homewares, linen and curtains,” Mr Beckwith said.

“I’d be saying more so the Amarts and Freedoms of the world, or Amart, Freedom and Ikea.

“Absolutely, Kmart’s got their own iconic brand that they work with, and Anko is a bit of a cult figure.

“Everyone looks for those Kmart hacks online, so I think they’ve definitely got a big target audience that they can capture.”

K Home has been designed with curated displays and room-based inspiration to help shoppers furnish their homes without paying premium furniture prices. Picture: Kmart

Mr Beckwith said Kmart’s ability to refresh products quickly and find the right locations would be critical if the concept expanded.

“They’re a really good retailer, a really powerful retailer,” he said.

“They’ve got a strong brand behind them with Anko and they’re able to refresh the product line continuously and keep up with trends pretty quickly and swiftly.

“They’re very well versed in the property sphere, so they know their target locations and making sure that they’re just in front of the right people and the right eyes.”

Mr Beckwith said the smaller K Home format could give Kmart more flexibility than its traditional department stores.

“Being able to be more nimble, these K Homes are able to go into a lot smaller spaces than a typical Kmart would,” he said.

“It allows them to plug the gaps in the network that they otherwise wouldn’t have been able to find.”

Vanta Advisory buyers agent Alex Groh said Kmart’s new K Home format would need to feel different from a regular store while keeping the pulling power of the Kmart brand. Picture: Supplied

Vanta Advisory buyers agent Alex Groh said the concept was a smart way to draw shoppers into a physical retail destination at a time when large-format retailers were battling for foot traffic.

“That’s often the biggest struggle that a lot of large-format retail businesses or bulky-goods businesses have. It is getting people there,” Mr Groh said.

“We know that once people are there, they do spend money.

“So it’s a great way to get them in, a great way to get them looking into bigger-ticket items and buying the ancillary items they generally sell as well.”

Mr Groh said K Home needed to feel different from a regular Kmart while still leaning on the parent brand’s pulling power.

“It can’t lose the Kmart brand entirely,” he said.

“But if it is going to be a unique store, then it has to differentiate itself from the others to attract people to actually go there and not just shop at a regular Kmart.”

The new K Home store at Box Hill South will trial a more immersive showroom-style layout as Kmart pushes further into furniture and homewares. Picture: Kmart

He said the concept would be tested in a competitive furniture market, with discretionary spending still under pressure.

“You’ve got brands that have been around for a long time, your Focus on Furniture, your Nick Scalis,” Mr Groh said.

“But where they may differentiate themselves is bringing the typical Kmart experience and adding that furniture as a layer on top to draw people in.”

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david.bonaddio@news.com.au

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