Melbourne CBD Operators Take on Ambitious Plans
A sharp rebound in business confidence from retailers is being witnessed in the Melbourne CBD as the city emerges from its historic lockdown.
“Enquiry has quickly picked up as operators watched the huge spike in activity in the CBD since reopening. There is now more confidence there will be a sustained period of strong trade given the high vaccination rates, and the evidence of people’s desire to go out and enjoy their freedoms,” Fitzroys’ James Lockwood said.
Lockwood said retailers had been particularly buoyed by NAB data showing more than $350 million was spent by diners, shoppers and drinkers in the CBD in the first 3 days out of lockdown, and the momentum has carried on.
In the latest show of confidence, Fitzroys’ Lockwood and Rick Berry have leased a 95sqm space at Southern Cross Lane within the Southern Cross precinct on Bourke Street owned by Brookfield and Blackstone, to a barber on a 5-year term.
The new tenant plans to transform the space into a 3-level barber shop that is believed to be the first of its kind in the CBD.
“The concept will bring something truly unique to the CBD and is another example of operators getting creative in order to entice people back to the city as Melbourne reopens,” Lockwood said.
“A tenant in the service retail sector committing to a fit-out and the works required to bring this vision to life reflects the confidence in the future of the CBD.”
“What we’ve seen throughout the COVID period is a number of operators taking the opportunity to assess their businesses and scale up their ambitions to provide something new that will actively draw workers and visitors to the city.
“Evidently, we are reopening with a competitive environment in which people will go to the CBD to dine, to have a drink, and to get a haircut, and businesses want to stand out.”
It follows a separate deal by Fitzroys for Brookfield and ISPT in the CBD, in which hospitality veteran Michael Ibrahim committed to a long 10-year lease over 161sqm at Makers Lane; a new retail laneway beneath the newly completed 405 Bourke Street Melbourne head office for NAB.
Ibraham will turn his current venture, Max on Hardware, in the historic Hardware Lane adjacent from a 5-days-a-week lunch venue into a 7-day business trading for breakfast, lunch and dinner from 2 adjoining restaurants and an upstairs function venue.
This will provide a drawcard to not just the 66,000sqm tower’s 6,000-plus NAB employees but the wider city workforce and visitors.
“We ran an expressions of interest process that generated multiple offers and ended up with Michael Ibrahim from Max on Hardware as we felt this would connect well with his proximity to Hardware Lane and Makers Lane,” Lockwood said.
“Lifestyle and hospitality amenity are among the major drivers that will attract workers to the office at a time in which flexible working arrangements are in vogue.
“Landlords are increasingly looking to draw visitors to their assets beyond their own tenants. This means making those assets a destination in their own right, rather than simply an office building.”
Build-to-Rent Developers Active
A local group has paid $22 million for a 1.21ha site opposite Highpoint Shopping Centre for the latest build-to-rent development project in Melbourne.
The site, which has an 8,265sqm office and warehouse, was owned by the JMC Group who had developed 3 residential towers behind it after buying it from the government. It is also located adjacent to the Maribyrnong Defence Site.
In Docklands, a partnership between Samma Property Group and Brighlight has just paid about $20 million for the Development Victoria-owned 4,509sqm site at 194 Lorimer Street, next to the Bolte Bridge.
The joint venture has a $1.7 billion pipeline of 11 projects with 3,144 apartments, including a development at 65 Haig Street in Southbank.
Meanwhile, Macquarie Asset Management will fund a $500 million pipeline of new developments in a partnership with property executives Matt Berg and Dan McLennan, called Local. They are beginning with the 8,803sqm former Vision Australia headquarters site at 346-350 Macaulay Road, Kensington, which sold for about $50 million and will make way for a 500-unit project.
Aware Super and Altis Property Partners recently bought the Bayview Hotel site on Queens Road with plans to create more than 300 build-to-rent apartments, while US-based Greystar received approval for a $500 million build-to-rent facility in South Yarra’s Forest Hill precinct, which will have 625 apartments across 2 towers and be Australia’s largest build-to-rent project to date.
Other major Melbourne build-to-rent projects include Mirvac developments next to the Queen Victoria Market, on the former Melbourne Convention Centre on Spencer Street, and in Brunswick, while Oxford Properties is planning a $450 million project in Footscray, and Hines has just bought a near-acre site also in Brunswick for a $250 million building.
Disclosure: The weekly Fitzroys Property Wrap is for information only on transactions in the Melbourne property market. Fitzroys provides this information as a public service. We are not purporting that all sales and leases within this report were transacted by Fitzroys. Terms/Privacy © Copyright 2021 Fitzroys.