Shopping, but not dropping
SOME of Melbourne's signature shopping streets are struggling in the face of battered consumer confidence but most are weathering the storm, agents report.
SOME of Melbourne's signature shopping streets are struggling in the face of battered consumer confidence but most are weathering the storm, agents report.Premium strips known for their retail focus, Chapel Street and Bridge Road, were finding it more difficult than others in the lead-up to Christmas, agents from Fitzroys and CBRE said.Chapel Street had several flagship tenancies up for grabs, with adidas, Rip Curl and Politix recently vacating large stores.Vacancies were at the southern less premium end of the street but the addition of some independent retail tenants was likely to offset any drift, Fitzroys agent Charles Emmett said."Judging by the quality of tenants looking to move into these strips . . . when you're seeing groups like LifewithBird, ksubi, Nudie Jeans moving into Chapel Street in the last five months, there's clearly money to be made there," Mr Emmett said.While more "for lease" signs were now being seen on strips across Melbourne, they needed to be seen in the context of the more popular shopping streets having vacancy rates below 2 per cent for the past five years, CBRE senior associate director Mark Wizel said."Naturally, when a couple of signboards go up it is going to look as if retailers are struggling," Mr Wizel said.Out of 87 shops in the "prime" section of Burke Road, only one shop was truly vacant.Food and beverage was proving to be the most resilient business, Mr Wizel said. "There is constant demand from cafes, restaurants and boutique culinary offerings generally seeking spaces between 70 and 350 square metres in Melbourne's leading strips," he said.Rents had been static over the past 18 months, Fitzroys director David Bourke said. "Properties that are well located will weather the ups and downs."Williamstown's Ferguson Street and Douglas Parade were showing potential, Mr Bourke said. Both had recently attracted national retailers including Witchery and Meredith. "You're seeing areas that were probably once not in favour, which are now in favour, and you've got those nationals coming in."Large retail sites recently vacated by Borders and Angus & Robertson in Burke Road had been quickly filled by Kathmandu and Cotton On, Mr Bourke said.Another trend was towards short-term leases and investors putting superannuation into retail property. Tenants "looking to navigate through a difficult period" were asking about commitments on properties from as little as 12 to 24 months, Mr Wizel said."In the last 18 months, post the GFC, a lot of people have been shifting money out of equities, going for a private approach with their super and investing in strip retail property," Mr Emmett said.