The strength in the large format retail market over the past year has resulted in high volumes of lease renewals, which are maintaining low vacancy rates within the state's established homemaker centres, according to agents.

But planning and competition in the sector remains an issue.

Philippa Kelly, chief executive of the the Large Format Retail Association, which represents Australia's Large Format Retail sector, says it is all about delivering what the customer wants.

"The LFRA supports a competitive retail market environment, because in the end it is the consumer that benefits," Ms Kelly says.

"A core focus of the LFRA is on issues relating to appropriate planning and responsible development of Large Format retail outlets. The LFRA seeks, clarity, consistency and certainty in regards to planning and zoning laws across the country."

Ms Kelly said it is unrealistic to expect bricks and mortar retailers to be unable to compete in an overregulated environment with archaic restrictions such as regulated trading hours when the likes of on-line retailing is open for business 24/7.

"The Large Format Retail sector is estimated to account for sales of $59.8 billion per annum nationally and 20.1 per cent of all retail sales; it is estimated to employ approximately 388,000 (FTE) people both directly and indirectly," Ms Kelly said.

However, the limited supply of large format retail space in NSW is prompting retailers to look at alternative sites, outside of homemaker centres, to facilitate expansion plans.

Shane Cook, CBRE's associate director for Large Format Retail NSW said the current high demand for space was being driven by increased retail spending, underpinned by lower interest rates,  the booming housing market and the resultant  "wealth effect".

Retailers such as Harvey Norman, Beacon Lighting and Nick Scali have all recently reported strong trading performances for their respective brands.

This, coupled with limited homemaker centre vacancies, is driving resourceful businesses to look at alternative options – particularly in light of the limited new construction activity.

"Vacant spaces within established homemaker centres can be difficult to obtain due to key areas being tightly held and zoning restrictions," Mr Cook said.

"With the tightening of vacancy rates we are finding retailers are focusing on expanding into key large format retail strips, located on main arterial roads, typically standalone sites."

One such example is Super A-Mart Furniture, which recently leased a site through CBRE at 152 Taren Point Road, Caringbah. The 3005-square-metre showroom was chosen as it was the only property to meet Super A-Mart's expansive size requirements. The site also benefits from a prime location on a major arterial road with excellent access and close proximity to other large format retailers including The Good Guys.

"As no suitable vacancies were available within existing homemaker centres, Super A-Mart saw the Taren Point Road site as an ideal opportunity to expand in a prominent location, which as a stand-alone store benefited from a large available floor area," Mr Cook said.

Due to the lack of available retail stock within Caringbah, Super A-mart also leased an additional 2485-square-metre warehouse nearby, in order to cater for its warehousing and customer pick-up requirements.

CBRE South Sydney manager Chris Ryan said there was strong demand from national retailers to source locations within the Shire, which was proving challenging given that traditionally this catchment is driven by local owners and operators.

"With high demand from both local and national retailers, we are witnessing increasing rents on the back of a highly competitive market," Mr Ryan said

A new CBRE report says further support for the sector will be provided through housing commencements, which are likely to jump over the 50,000 mark in NSW in 2015 – more than double the level of commencements seen in recent years.