Melbourne CBD Retail Revival Sees Vacancies Hit Pre-COVID Low

Melbourne’s CBD retail vacancies have hit a long-term low as the reshaping of the city draws big crowds at critical times of the week – and big spending – spurred by the completion of major developments, the opening of new retail and hotel offerings, and a world-class events calendar.

According to Fitzroys’ new edition of Walk the CBD – the industry standard report for retail vacancies and tenancy mixes within Melbourne CBD’s precincts – vacancies have reduced for a fourth consecutive year, from 6.1% down to 4.6% over the past 12 months.

In the depths of COVID lockdowns, retail vacancies had reached over 30%.

“The reshaping of Melbourne’s CBD has translated into long-term lows in vacancies, a new retail landscape, and an unmistakeable newfound buzz,” said Fitzroys Division Director – Agency, James Lockwood.

“The Melbourne CBD has reaffirmed its role as the cultural and financial heartbeat of Australia’s fastest-growing city.

“Retailers have really come into 2026 optimistically, and the city’s had a fantastic start to the year.”

Critical parts of the city have been transformed with the completion of major infrastructure and property projects.

The Metro Tunnel began full services at the beginning of February. For Swanston Street - the bellwether for the city’s struggles in the depths of COVID lockdowns – the vacancy rate tightened further to a sensational 1.9% as retailers sought to be close to the tunnel entrances of the Town Hall and State Library stations ahead of their opening.

“Retailers were eagerly anticipating the completion of the Metro Tunnel, which has made a hugely positive impact on Swanston Street,” Lockwood said.

“The tunnel entrances have also boosted pedestrian traffic along Collins Street.”

Bourke Street Mall saw the opening of the Mecca flagship store in the former David Jones building, which has prompted a surge of visitors along the famous strip. It also saw the completion of the $150 million Melbourne Walk, which replaced the former Walk Arcade with 6,000sqm of retail space, including a new JD Sports flagship, and two IHG hotels – Hotel Indigo and Holiday Inn – bringing circa 450 rooms to the immediacy of the area.
The mall was also boosted by 900 staff at advertising agency Clemenger moving into its new offices above Mecca, adding further to the daytime activity.

Bourke Street Mall’s vacancy rate was recorded at just 4.0%. Events have been bringing in visitors and retailers are responsive to changing habits.

“We’ve seen retailers be really responsive to the shift in retail demand and changing habits of visitors to the CBD,” Lockwood said.

“Successful CBD tenants have worked out over the past few years when people are visiting the city, and how to maximise trade around those times. There’s an emphasis on the mid-week, and then on Friday nights and over the weekend.

“The balance of more people entering the city over Friday nights and the weekends, and their combined spending power, is outweighing the lower visitor numbers being recorded on Mondays and Fridays.”

Melbourne City Council reported a record $1.2 billion in total spending in December 2025.

“More people are coming into the city to get a full day’s experience – they’ll go to the Mecca store, visit a restaurant or café to eat, then head to the NGV or the theatre district.

“With the bigger outings comes bigger spending, and that’s reflected in another fall in retail vacancy rates and the buzz of the city.

“This really reinforces that the people who come into the city aren’t predominantly office workers. There are Melburnians, tourists, residents and students who all bring something to the CBD.

“Melbourne’s reputation as the sports and events capital continues to hold true. The Australian Open into the Grand Prix, the AFL season, finals series and Grand Final, and Melbourne Cup bring huge numbers of visitors across the year,” Lockwood said.