Retail rent records smashed amid CBD retail regeneration
Asia-based food and beverage operators demonstrate huge demand for retail space in the north of Melbourne’s CBD, capitalising on student accommodation and residential development boom and driving a generational change that is reshaping the retail landscape.
Fitzroys Alex Shum leased the 50sqm former Student Flights space at 339 Swanston Street to a bubble tea operator at a record rate for the precinct of $6,000 per sqm.
That followed the off-market lease of 299 Elizabeth Street to international bubble tea brand Prime’s Hai, at $3,150 per sqm, as well as the 200sqm double-fronted building at 423-425 Elizabeth Street to dessert house chain Hui Lau Sahan from Hong Kong, at a precinct record of $400,000 per annum net.
“This demand, driven by Asia-based hospitality businesses, continues to push rental rates into uncharted territory, Shum said.
Shum said the CBD’s north has become increasingly sought after and targeted by Asia-based franchises who are well-known overseas, as they are familiar to and popular with the large numbers of students living in the surrounding high-rise developments, close to the universities precinct.
He said the Chinatown precinct has traditionally been designated as the hotspot for Chinese and other Asia-based operators, but the growth in student accommodation and high-rise development has in a sense created a new Chinatown in Melbourne’s CBD.
Fitzroys also sold the 125sqm space at 526 Swanston Street to a Singaporean-based investor with a portfolio of successful restaurants in their home country for their first Australian venture.