GPO: opening late every night of the week...

Melbourne's GPO will become home to Sweden's H&M. Photo: Paul Harris

The opening of the first H&M fashion store on April 5 in the former GPO in Melbourne will spark another round of retail invasion and high competition for the Australian labels.

In an interview with BusinessDay, Hans Andersson, the country head of H&M Australia, said the group was very keen to expand as soon as it can secure appropriate stores.

The next one will be in Sydney, speculated to be at 345 George Street, then Brisbane, Adelaide and Perth, in no particular order.

Andersson says for now the stock would be stored and distributed from the new logistics centre at Eastern Creek, Sydney, but as new stores were opened the group would look at leasing similar warehouses in each state.

He says Australia had always been on the Swedish retailer's radar, but finding the proper stores was key.

''We have been looking for at least three years but no sites were appropriate, But when we saw the GPO is was a no brainer,'' he says.

It will open at 10am and queues around the Bourke Street Mall and Elizabeth Street are expected, in a similar way to the rush by Sydneysiders to the opening of the first Zara store in Pitt Street Mall.

The new H&M store opens as experts sense a turnaround in the general retail sector.

Michael Bate, head of retail at Colliers International, says foreign investment, a weaker Australian dollar and the improving housing market were all contributing to gains in Australia's retail sector.

''The healthy increase in retail spending over the past six months annualises out at a very strong 9.4 per cent per annum,'' Bate says.

''There are many factors contributing to this, but one of the more interesting drivers is the amount of foreign investment in Australian property.''

He says the impact of offshore investors on the residential market has a flow-on effect for the retail sector via increased demand and prices for housing.

A new white paper report by Colliers International's director of research, Nora Farren, says interest rate cuts have fuelled strong growth in house prices, which have strengthened household balance sheets and improved consumer confidence, driving more spending.

''The lift in retail spending has now been sustained for a six month period, and is helping to offset soft business investment as the economy transitions away from relying on the mining sector to drive growth,'' Farren says. ''The weaker $A has also assisted curtailing some of the spending leakages to offshore online shopping and outbound tourism.''

The wealth effect from the housing boom, where new homes are furnished with new items, was also boosting retailer bottom lines.

Bate says the increased residential property values had also affected how wealthy consumers feel and, in turn, their propensity to spend.