CBD Retail Beginning to Stir
The glacial CBD retail market is beginning to see some action, with Fitzroys finalising 3 leases in different parts of the city this week.
In the Paris end, Austria-based Wolford has leased 15 Collins Street. The brand has been long-established in Australia and Collins Street is a good fit for its positioning in the market. Fit-out of the 80sqm shop will commence in early June to showcase the just-released 2021 international store format.
Leasing agent James Lockwood, who heads up Fitzroys’ retail leasing team said, “Rental rates have held up extremely well in the east section of Collins Street despite the significant disruptions of the past 12 months”.
In central Collins Street, jewellery manufacturer and retailer Ostara has taken a 5-year lease at 271 Collins Street, a building also known for the Peter Sheppard flagship store.
Lockwood said that this unusual deal involved the tenant leasing the whole 610sqm of the stunning heritage mezzanine level of the building. Dual 27-metre galleries link the Collins Street and internal frontages of the premises with access via the building arcade that runs between Collins Street and Flinders Lane.
In the north end of the CBD, a 3rd lease has been signed off by mobile phone and repair retailer GorillaSix at 309 Swanston Street. The high rental rate of circa $5,000/sqm reflects the size of the tenancy, which is a diminutive 33sqm. The tenant is another Sydney retailer that has opted to expand in Melbourne.
“Despite the universities still in the process of reopening, occupancy levels in this north section of Swanston Street are very high with only 3 or 4 shops still to reopen post the COVID shutdown,” Lockwood said.
In a sign of positive news to come, Fitzroys has several more CBD retail leases close to finalisation. Lockwood is very encouraged by the levels of inquiry but notes that landlords have had to meet the market in some instances.
“These deals did not involve substantial discounts on rents being paid pre-COVID. In other instances however, compounding annual increases in previous years have seen
rentals get ahead of market levels and in some cases rental reductions of up to 30% and sometimes more have been necessary to generate tenant interest.
“Incentives are also still an important part of the transaction but the main thing is that we have enquiry – and most of this is from quality retailers with good experience and often multiple outlets that we are comfortable to recommend to our clients.”
Australia Post Signed and Sealed for Richmond Delivery
Australia Post will move its headquarters to Richmond after signing a deal with Charter Hall to anchor a future $130 million, 13-storey office building in the popular city fringe market.
The tower will be constructed at 462-482 Swan Street, which is owned by the Agosta family and occupied by its Mitchell Buildings Supplies business. The family is known for developing Nino Early Learning Centres.
Australia Post expects to move into its new 35,000sqm headquarters in 2024. It will pay a reported circa $650/sqm including outgoings.
It is currently located the Southern Cross tower on Bourke Street.
The Mitchell Buildings Supplies site is owned by Frank and Beverly Agosta. Next door, Riverlee has partnered up with Bamfa Properties, run by their son Adam Agosta, to speculatively build a $190 million, 13-level commercial tower.
Meanwhile, Bamfa Nominees has just bought a Burnley office building at 182-184 Stawell Street for $15 million from complementary medicine company BioRevive. The 2,332sqm site has a double-storey office building that returns $412,000pa from several short-term leases.
Salta earlier this month lodged plans for a $50 million office building at 173-177 Barkly Avenue nearby, and this week Salta and Abacus Property Group secured flexible workspace provider Hub Australia for a new 3,000sqm venue at their 459-471 Church Street development in Richmond.
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.