McDonald's shuts shop over renovation plans
McDonald's has had a rare setback, closing a CBD restaurant that has occupied a prominent spot on Collins Street for more than 20 years.
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.