Sydney food franchises hunger for Melbourne
Many small food retailers with a strong franchise presence in Sydney have begun to aggressively expand stores in Melbourne, CBRE's Zelman Ainsworth said.
Cafe business Luneburger German Bakery which has eight stores in Sydney was the latest arrival in Melbourne signing a lease for its first store in Elizabeth Street, Mr Ainsworth said.
"Tenants have reached a ceiling and are looking at other markets to expand into."
Food and beverage as a proportion of the city's retail space has grown significantly since the global financial crisis, now filling 25 per cent, figures from Savills Australia show.
Brisbane-based Eagle Pizza Boys were also inquiring about space after taking a stake in Victorian cafe chain Degani Bakery Cafe, Savills' Michael Di Carlo said.
Cibo Espresso, an Adelaide coffee franchiser, was seeking major expansion on the eastern seaboard after partnering with private equity-owned Retail Zoo, Mr Di Carlo said.
The growth in people living in the CBD, shoppers and city workers were driving the expansion and focus on Melbourne.
Mr Ainsworth said the new Emporium development was taking a lot of tenants out of the market but the space was being absorbed quickly, which was keeping vacancy rates low.
Other licensees with a strong Sydney presence that were now in Melbourne include Cupcake Bakery, Sumo Salad, Blow Dry Bar, Wow Cow and Ben & Jerry's ice creams. Guzman Y Gomez and Mad Mex also have aggressive rollout plans.
Frequently Asked Questions about this Article…
Sydney food franchises are moving into Melbourne CBD because many brands have reached a saturation point in Sydney and are seeking new growth markets. Melbourne’s rising population of apartment dwellers, along with shoppers and city workers, is driving demand for more food and beverage outlets in the CBD.
Luneburger German Bakery, which already has eight stores in Sydney, signed a lease for its first Melbourne store on Elizabeth Street, marking a recent example of Sydney food franchisers expanding into the Melbourne CBD.
According to Savills Australia, food and beverage now make up about 25% of Melbourne’s retail space, reflecting significant growth in the sector since the global financial crisis.
Other licensees with a strong Sydney presence now in Melbourne include Cupcake Bakery, Sumo Salad, Blow Dry Bar, Wow Cow and Ben & Jerry’s. Brands with aggressive rollout plans mentioned in the article include Guzman y Gomez and Mad Mex. Brisbane-based Eagle Pizza Boys and Adelaide’s Cibo Espresso are also pursuing Melbourne expansion.
The new Emporium development is taking many tenants out of the market, but the space released by that activity has been absorbed quickly, which is helping to keep retail vacancy rates in Melbourne low, according to CBRE’s Zelman Ainsworth.
Yes. The article notes that Eagle Pizza Boys inquired about Melbourne space after taking a stake in Victorian cafe chain Degani Bakery Cafe, and Cibo Espresso is pursuing major eastern seaboard expansion after partnering with private-equity owned Retail Zoo.
Franchises are targeting the Melbourne CBD — particularly areas with high numbers of apartment dwellers, city workers and shoppers. The article specifically mentions a lease on Elizabeth Street and broader interest across the CBD.
Everyday investors tracking this trend should monitor tenant rollouts, changes in Melbourne CBD vacancy rates, new retail developments like the Emporium, and announcements from specific franchise groups (for example Luneburger, Cibo Espresso, Eagle Pizza Boys, Guzman y Gomez and Mad Mex) to gauge demand and leasing momentum in the retail food sector.
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