Shopping strips find pickings a little slim
Melbourne's prized street shopping strips have hit a new low.
Several of the city's top destination streets are struggling as shoppers chase bargains online and big suburban malls such as Highpoint roll out upmarket refurbishments.
In Bridge Road - once renowned as a vibrant discount clothing strip - more than one in 10 stores are vacant. Traditional haunts such as Toorak and Burke roads are also hurting.
Between them, the number of empty shops and vacancies has risen to 11.61 per cent, 9.56 per cent and 5.08 per cent respectively.
Others, such as Chapel, Acland and Church streets, are faring better.
Nevertheless, tough retail trading conditions have lifted the average vacancy rate for the city's 11 premium strips to its highest level in 13 years.
In January this year, vacancies rose to 5.35 per cent. In 2000, they were 3.3 per cent, figures from CBRE and Knight Frank show.
In that time, competition from online, bulky goods, direct factory outlets, refurbished suburban malls and even heavyweight CBD retailers has intensified.
Shopping strips with a supermarket, bank, and retailers that weren't reliant solely on discretionary spending, were more resilient, Fitzroys director David Bourke said.
The dominant retail categories on most streets are food outlets or clothing and footwear.
Clothing is the most vulnerable category to changing shopping habits.
"Consumers still want to spend time in retail strips," Knight Frank research director Richard Jenkins said. "But they've got to evolve and offer a more unique presence."
CBRE's Zelman Ainsworth has noticed an improvement this year.
A property at 178 Chapel Street in Windsor was filled within a week of a "for lease" sign being erected, he said. Another in Victoria Street, Carlton, recently attracted similar interest.
"The level of inquiry that is being received across our leasing campaigns has literally doubled since 2012," Mr Ainsworth said.
CBRE data shows rents remained relatively stable last year.
Toorak Road in South Yarra had the lowest ($400 to $700 per square metre) while Chapel Street commanded the highest ($1000 to $1400 sq m).
Investors had brought on sharp yields, which meant rents have grown steadily, Mr Jenkins said.
"That has become a factor. There will have to be an adjustment in rents to attract tenants," he said.
Properties on popular streets are prized by investors because they are geographically limited.
"The amenity they have is why they are sought after by investors even though they're offering a low return compared to other asset classes. Ultimately the strips are irreplaceable," Mr Jenkins said.