Hungry Jack’s snapped up the 500 sqm ground floor space on the busy corner of Elizabeth Street and La Trobe Street for its new CBD flagship site. Terence Yeh and Alex Shum of Fitzroys negotiated the 15-year lease at a commencing rental of more than $700,000 per annum gross on behalf of Landream.
It was the first commercial leasing campaign for the space in around 20 years, following an extended period of tenure by Endeavour College of Natural Health. The deal comes as a generational change of retail and hospitality tenants taking place through the city’s booming northern precinct.
Student accommodation and residential development through the north of Melbourne’s CBD continues to reshape the precinct’s retail offering, and push rents to record levels.
Shum and Yeh have kicked off the new quarter by negotiating the 10-year commercial lease of 200sqm at 423-425 Elizabeth Street to a China-based dessert house, at a record rate of $400,000pa net for a retail space in the area.
“Asian-based hospitality businesses are driving enquiry and take-up in the strip, looking to capitalise on the busy location close to the Queen Victoria Market, Melbourne University and RMIT University,” Shum says.
Over the past few months, Melbourne’s rising population, booming tourism industry and continued growth in consumer confidence has contributed to the improving retail trade in the CBD.
According to the Australian Bureau of Statistics, Melbourne’s population rose 11.2% to 46,104 over 2016/2017, consistent with a growing appetite for development sites providing scope for high density accommodation throughout the grid. The Consumer Sentiment Index increased by 3.9% to 106.1 in July, and is now at its highest since November 2013.
Overall, the retail leasing market is showing signs of further improvement following the shake-up from metro tunnel works which commenced in late 2016.
168 Exhibition Street, Melbourne: Starbucks signed a seven-year lease for the 117sqm space at around $1,400/sqm gross.
349-351 Flinders Lane, Melbourne: The premises of Bluestone Bar & Restaurant was commercially leased to a new Japanese fusion venture, which will refurbish the 690sqm ground floor and basement area of the heritage-listed building. It will pay $216,500pa gross to a private Melbourne investor.
98 Bourke Street, Melbourne: Bangkok Terrace will open its second restaurant, following its maiden site on Hawthorn’s Riversdale Road, within the CBD and close to the corner of Exhibition Street after agreeing to a five-year deal with two five-year options at $200,000pa gross.
10 Howey Place, Melbourne: Ethical pie baker Princes Pies signed a 5 5-year commercial lease for the 22sqm CBD space at more than $2,300/sqm for its maiden offering.
20 Howey Place, Melbourne: A Korean-inspired fast food outlet has signed a five-year commercial lease over the shop at $55,000pa plus outgoings and GST.
40 Market Street, Melbourne: Simpsons Burgers is opening a second CBD site after leading the 100sqm space at $80,000pa gross on five-year commercial leasing with options, from landlord MTAA Superannuation.
13 Degraves Street, Melbourne: Spanish doughnuts retailer El Churro Café leased the 63sqm shop at $185,000pa.
9C, 271 Collins Street, Melbourne: Vietnamese group MetaScent has signed a 3 3-year deal over the 66sqm space at $70,000pa net. It will be one of the first DIY fragrance experience offerings in Melbourne.
Shop 6, 288 Flinders Lane, Melbourne: Womens’ fashion designer Tiffany Treloar took up the 149sqm space within the prime section of the strip, which crosses through the iconic Degraves Street and Centre Place destinations, on a 3 3-year deal at circa $190,000pa gross from private owners.
271 Little Collins Street, Melbourne: Californian label TOMS Shoes commercially leased the 113sqm double-storey space at $230,000pa.
Disclosure: This Melbourne CBD 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.