Services in CBD demand

Retail services such as gyms, masseurs and beauty salons are challenging the CBD's traditional heavyweight fashion and food sectors.

Retail services such as gyms, masseurs and beauty salons are challenging the CBD's traditional heavyweight fashion and food sectors.

Rapid population growth in central Melbourne is driving a shift towards the services sector.

More than one in 10 shopfronts now house some form of service business, from tailors to nail salons, Savills Australia Spotlight says.

"The CBD population has more than doubled since 2004 and is expected to double again by 2020," Savills research director Glenn Lampard said.

That growth was driving a parallel demand for services. Virgin Active recently committed to 4400 square metres of space in Leighton's 567 Collins Street development for a health club. And Australia's largest childcare provider, Goodstart, recently took 550 sq m of converted office space on the fourth level of 276 Flinders Street.

The total space occupied by CBD service businesses was 11 per cent, Savills' report said. In 2008 it was 6.1 per cent. Fashion occupied 39 per cent and food 25 per cent.

Cafes, restaurants and food services have grown from just 15 per cent of the market 13 years ago.

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