Landmark lease amid ongoing CBD retail transformation: The boom in student accommodation and residential development through the north of Melbourne’s CBD continues to reshape the precinct’s retail offering, and push rents to unprecedented levels as operators rush to take advantage of the area’s growth.
Fitzroys’ Alex Shum and Terence Yeh leased the 200sqm double-fronted building at 423-425 Elizabeth Street to a dessert house chain from mainland China, at a precinct record $400,000 per annum net on a 10-year lease. The owner is a private local investor.
The leasing campaign was the first time in more than four decades the property had been available, having been the long-term home of Spot On Motorcycles, which has moved to North Melbourne.
“The location is well supported by the surrounding student accommodation buildings and complimentary Asian food businesses in the strip, and its position is a busy location close to the Queen Victoria Market, Melbourne University and RMIT University,” Shum said.
“The long-term deal reflects the confidence business have in the growth prospects of the Melbourne CBD’s northern precinct.”
In recent months, international Chinese restaurant chain Orient Hot Pot took up the nearby 55-59 A’Beckett Street property (formerly occupied by electronics specialist Jaycar) and New Life Hot Pot opened at 470 Little Lonsdale Street. They join Asian-based operators Shujinko Ramen, Hot Star Chicken, Gong Cha, Torosan Ramen, Nene Chicken, Sushi Hub and renowned Chinese BBQ restaurant Rose Garden in the area.
Established operators looking for space has extended to Hungry Jack’s, which recently leased 500sqm at 260 La Trobe Street - on the busy corner of Elizabeth Street - for its new CBD flagship site, on a 15-year deal at $700,000pa.
Hungry Jack’s agreed to a 15-year lease within the A-C Building at $700,000 per annum gross.
There are an estimated 12,000 apartments being constructed in the area, and the pipeline of new purpose-built student accommodation projects nearby in the city includes a 300-unit development by Singaporean group Wee Hur at 185 A’Beckett Street, and Scape Student Living’s 61-level, 800-bed tower at 97 Franklin Street, Melbourne.
On the city’s northern fringe, Scape has just purchased 558-566 Swanston Street with a permit for a 159-apartment tower, near its 650-bed 557 Swanston Street development on the former CUB site.
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.