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We derive a central limit theorem for a spatial $\Lambda$-Fleming-Viot model with fluctuating population size. At each reproduction, a proportion of the population dies and is replaced by a not necessarily equal mass of new individuals. The mass depends on the local population size and a function thereof. Additionally, as new individuals have a single parental type, with growing population size, events become more frequent and of smaller impact, modelling the successful reproduction of a higher number of individuals. From the central limit theorem we derive a Wright-Mal\'ecot formula quantifying the asymptotic probability of identity by descent and thus isolation by distance. The formula reflects that ancestral lineages are attracted by centres of population mass and coalesce with a rate inversely proportional to the population size. Notably, we obtain this information despite the varying population size rendering the dual process intractable., Comment: 54 pages, 2 figures