Retail vacancies rise on Melbourne's well known shopping strips

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Oct 20, 2016

Retail vacancies rise on Melbourne's well known shopping strips

Melbourne’s retail shopping strips were once much admired by fashionistas all over the country, but shops are sitting empty as the city, malls and online outlets deliver greater choice.

Image: Alejandro Muniz Delgado, Flickr Creative Commons.

Chapel Street, Melbourne, where retail vacancies are on the rise.

Melbourne’s retail shopping strips, once much loved amongst fashionistas all over the country, are experiencing rises in retail vacancies as shoppers choose the city centre or go online for their retail therapy.

Almost one in six shops are vacant on both Chapel Street, South Yarra and Bridge Road, Richmond.

Chapel Street's vacancy rate climbed from 11.0% in August 2015 to a record high of 13.5% in September 2016, according to Knight Frank Director, Research and Consulting, Richard Jenkins.

Bridge Road, which appeared to be making somewhat of a comeback after recording retail vacancies of 20%, saw vacancies climb again during the period.

“Bridge Road looked like it was recovering, but the vacancy rate rose from 13.0% to reach almost 17%,” said Jenkins.

Both Chapel Street and Bridge Road have been feeling the harsh effects of well known retailers leaving their strips, according to Jenkins. David Lawrence, Karen Millen, Forever New and Metalicus have recently left Chapel Street, while Bossini, Ed Harry, Bird of Prey and Godwin Charli have abandoned Bridge Road.

Online retailing, clustering together of discount shops, improvements in city-centre shopping, and the growing prevalence of malls in Melbourne are all taking their toll on strip shopping.

Australian consumers spent around $20.6 billion on online shopping in the last 12 months, according to Knight Frank.

Knight Frank's research shows that Melbourne’s CBD retail market has recorded its lowest vacancy rate in five years, falling to 2.4%.

Rents in Chapel Street, South Yarra still achieve the highest rent, achieving between $800 and $1,500 per square metre per annum. But higher vacancies are likely to put downward pressure on rents, according to the Knight Frank research.

Despite the higher vacancies, Jenkins is optimistic about the future. He says the outlook for many of the prime retail strips is positive, as new apartment developments come on stream. Greater pedestrian traffic is likely to see a new shoppers returning to these well know retail haunts for their fashion fix.