McDonald's shuts shop over renovation plans
It is believed to be only the third time the fast-food giant has shut a Melbourne CBD outlet since it launched in Australia in 1971.
Last month, McDonald's left the 300-square-metre, ground-floor spot in 470 Collins Street, a 17-level office tower known as the Christie Centre. The closure leaves McDonald's with no presence in the western half of the CBD beyond Queen Street.
A spokeswoman for McDonald's would not comment, but industry sources say the chain was upset at the plans of the building's owner to renovate and extend the street-front retail precinct of the building, which has been untouched since the restaurant opened in the early 1990s. By the end of the 20-year lease, McDonald's is believed to have been paying only $400 to $500 per sq m in rent.
Private investor Malik Suleman Pty Ltd, which bought the building for $30,550,000 in 2011, has applied for council permission to build a two-level addition in the forecourt and extend the front of the ground floor closer to the Collins Street footpath.
Currently, pedestrians have to walk up a flight of steps to reach the retail spaces, which are set back about eight metres from the street.
The plans will add about 150 square metres of new space, taking the building's total ground floor retail space to 1000 sq m that is likely to be split into three tenancies. Rents are expected to be around $1200 per sq m.
"The extension will capitalise on the rents per sq m available at the front of the tenancy because that's where the dollars are. It's also to make it easier for pedestrians to access the building," said Ben Tremellen, Colliers International's retail leasing manager .
Interest is expected to be strong from big-name retailers, who have been pushing into the western end of Collins Street, Mr Tremellen said.
The redevelopment is likely to be finished by year's end.
cvedelago@theage.com.au
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McDonald's closed the long-standing Collins Street outlet after more than 20 years in the 300 sqm ground-floor spot at 470 Collins Street. A company spokeswoman wouldn't comment, but industry sources say the chain was unhappy with the building owner's plans to renovate and extend the street-front retail area.
The closure is very rare — it's believed to be only the third time McDonald's has shut a Melbourne CBD outlet since the company launched in Australia in 1971.
Private investor Malik Suleman Pty Ltd, which bought the Christie Centre building for $30,550,000 in 2011, has applied for council permission to add a two-level forecourt addition and extend the ground-floor front closer to the Collins Street footpath.
The plans will add about 150 square metres of new space, taking total ground-floor retail to about 1,000 sqm. The owner intends to split that space into three tenancies and improve pedestrian access by reducing the setback from the street.
Rents after redevelopment are expected to be around $1,200 per square metre. By contrast, McDonald's is believed to have been paying only $400–$500 per square metre by the end of its 20-year lease.
Yes. Colliers International's retail leasing manager Ben Tremellen said interest is expected to be strong from big-name retailers who have been pushing into the western end of Collins Street.
The redevelopment is likely to be finished by the end of the year, according to the article.
For investors, the story highlights how retail redevelopment can lift rental income and attract premium tenants: the owner plans to convert setback space into more street-front retail, boosting expected rents to about $1,200/sq m and creating three tenancies that should appeal to major retailers moving into western Collins Street.
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