Laneway Leases Show CBD Confidence
Hospitality operators and retailers anticipating the return of hustle and bustle to the Melbourne CBD have committed to long-term leases within city laneways Equitable Place and Manchester Lane.
Fitzroys’ James Lockwood negotiated the deals at 12 Equitable Place and 10/26 Equitable Place, both on secure 5+5-year terms.
“These leases demonstrate the faith operators have in the future of Melbourne’s CBD, and the significant role its iconic laneways will continue play in city life,” Lockwood said.
He said the deals continued the trend of properties with existing kitchen infrastructure being particularly attractive to hospitality tenants, which has been consistent throughout the COVID period.
At 12 Equitable Place, an Asian restaurant leased the 110sqm space at $95,000 per annum. The tenant has an existing restaurant in North Melbourne and is now pushing into the CBD. Lockwood said it is noteworthy the business has made its first expansion move during the COVID-19 period.
The 45sqm space at 10/26 Equitable Place was leased to a café at $45,000 per annum.
Lockwood said the operator has run another café previously in the CBD with another team and now looking to venture out onto his own.
“Both properties were leased to tenants with previous venues, and an understanding of the unique opportunities presented to operators in having a CBD laneway location,” Lockwood said.
“Spaces with kitchen fit-outs allow hospitality operators to readily establish and expand their presence in the market, without having to commit to comprehensive fit-outs.”
Rick Berry of Fitzroys negotiated the 5-year lease of Shop 3, 234 Flinders Lane to international health, beauty and wellness products retailer FR International, part of FRONTROW Enterprise Philippines, Inc.
The 39sqm space within the historic Manchester House was leased at $60,000 per annum, or $1,538 per sqm, plus GST with 4% annual increases, and 1 month rent-free.
“This shop is on the Manchester Lane frontage, and is ideally placed for a tenant like FR International who was seeking an iconic and recognisable location for their first representation in Melbourne,” Berry said.
FRONTROW began its Australian operations in Sydney in July, 2019, and has 90 branches in the Philippines, as well as branches in Dubai, Abu Dhabi, Fujairah, Singapore, London and Hawaii. Among its products are Australian-made health supplements, cosmetics made in Korea, and soaps made in the Philippines.
“A retailer with international experience committing to a secure lease at this time demonstrates the confidence businesses have in Melbourne’s CBD beyond the current environment,” Berry said.
Designed by architects Bates, Peebles & Smart, Manchester House was constructed over 1911 and 1912 on the corner of Flinders Lane and Manchester Lane, and is a pre-eminent example of the many rag-trade warehouses that dominated the area in the first half of the 20th century.
Fitzroys sold a strata portfolio of 2 large office floors and the retail unit within Manchester House to The Theosophical Society.
Manchester House is opposite the corner of Royston Place, which will form part of the entrance of the future Town Hall Station, part of the $11 billion Metro Tunnel project that will reshape the Melbourne CBD.
Other retailers have just taken up space in close proximity to Manchester House. The location is metres from Degraves Street and Centre Place, while Melbourne City Council has just introduced more pedestrian-friendly traffic conditions along Flinders Lane as the CBD moves towards reopening. Across Flinders Lane, Freechoice Tobacconist has leased a 38sqm space at Bible House, on the corner of Scott Alley.
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 2020 Fitzroys.