High Street, Armadale Throws Down The Gauntlet to Church Street, Brighton
There’s a new contender to Church Street, Brighton’s title of heavyweight champion among Melbourne’s shopping strips.

Fitzroys’ annual Walk the Strip report, which has been running since 2017, has shown Church Street as the perennial holder of Melbourne’s lowest vacancy rates and among the highest rents – the result of long queues of retailers constantly jostling to get into the strip that services one of Melbourne’s most established and affluent catchments.

But High Street, Armadale has roared into contention for top spot.

Over the years, High Street has morphed from an antiques precinct into a bridal hub, and then a viable alternative for retailers looking to escape the then-higher rents of Chapel Street, South Yarra. It has now become a destination of choice for high-end fashion boutiques.

“The latest Walk the Strip report reaffirmed the outperformance of High Street, Armadale, to the point where it is well and truly in the discussion for the title of Melbourne’s best- performing shopping strip,” said Fitzroys Division Director – Agency, James Lockwood said.

The Titleholder

Church Street vacancies tightened over the year to an ultra-low 0.7%, again recording the lowest rate in Melbourne.

Recent deals in the tightly-held strip have included OPSM expanding its footprint within the strip at 45 Church Street in an off-market lease negotiated by Fitzroys’ Tom Fisher and Mark Talbot, and the agents also leased 82 Church Street to Rodd & Gunn. The high-end menswear retailer selected Church Street to make its Melbourne shopping strip debut in a deal worth $150,000 per year plus outgoings and GST – all of its other sites are concessions in Myer department stores.

“It says a lot that Rodd & Gunn selected Church Street, Brighton for its first Melbourne shopping strip store,” Talbot said.

“Retailers don’t make these decisions lightly.

“Church Street services one of Melbourne’s most established and affluent catchments, taking in Brighton – which has a median house price of more than $3.15 million – and surrounding bayside suburbs, providing high levels of constant foot traffic and spending power.

Church Street boasts a roll-call of respected and popular high-end fashion boutiques, such as Scanlan Theodore and Salt Clothing, and more recent entrants Fine Day, Elk, Grace and Simone Pérèle, through to activewear brands Lululemon and giant Nike, to go with the Palace Cinemas complex at the Dendy, national retailers, a Woolworths supermarket and well-patroned eateries.

Talbot said Church Street, Brighton is remarkably tightly held by investors, who invariably have a secure income stream from a quality tenant that is benefiting from high foot traffic and local spending power.

“Properties offered for sale in the strip are very rare, and the market recognises this with fierce competition to secure a prized blue-chip Melbourne shopping strip investment, leading to strong sales campaign results and tight yields,” Talbot said.

Fitzroys has been responsible for almost all investment sales along Church Street since the NAB property at number 35 sold in September 2019. Among those, the agency sold that property again last year in a sensational $7.15 million deal that reflected a sharp 3.5% yield and land rate of $24,826 per sqm; Fitzroys also sold 51 Church Street, occupied by Flight Centre, on a thin yield of 3.2% and a high building rate of $40,000 per sqm, while most recently Fitzroys sold 48 Church Street, home to Bed Bath N’ Table on another sharp yield of just 3.6%.

“Yields in Church Street haven’t really moved despite the run of interest rate rises over the past couple of years. Astute investors see the shopping strip as very stable,” Talbot said.

The Contender

High Street, Armadale has been building its case to be the number one shopping strip in Melbourne over a number of years.

Fitzroys’ Walk the Strip report showed vacancy rates came down for a third straight year from 3.2% to just 2.3% over the past year, as more specialty tenants took up space.

“High Street is at the seat of a broad, established and very affluent catchment – one that spans Armadale, Malvern, blue-ribbon Toorak, home to Melbourne’s most expensive houses, and South Yarra – and draws visitors from beyond,” said Fitzroys Associate – Agency Lewis Waddell.

“Retailers see a strip that enjoys high levels of foot traffic and a catchment with remarkable spending power, while offering growth prospects through residential development on and around the strip that will boost the immediate population.

“The surge we’ve seen of retailers looking to get a foothold in the strip is unprecedented.

“Without a doubt, High Street, Armadale is the most in-demand strip in Melbourne, and possibly Australia.”

As a result, the strip has become the most expensive place in suburban Melbourne to set up shop. Ultra-prime shops command rent rates of as high as $2,000 per sqm. In Church Street, Brighton, a similar space is attracting $1,300 to $1,400 per sqm.

“Retailers want the high foot traffic and spending power, and businesses want to be close to other strong traders.”

High Street, Armadale is home to top-shelf boutiques such as Scanlan Theodore, Cos, Zimmermann, Camilla and Marc, Viktoria & Woods, Bassike, and Rebecca Vallance, to go with Mecca Cosmetica, Nimble Activewear, Woolworths Metro and a growing number of quality wine bars and eateries.

Queensland fashion label Dissh, which recently won major backing from retailing billionaire Brett Blundy, is among the latest entrants following a deal negotiated at 1028 High Street by Waddell.

The label was founded in Brisbane as a single-store business by the mother of current CEO, Lucy Henry-Hicks, who joined the brand in 2006 and oversaw a pivot towards e-commerce. Despite macroeconomic headwinds in recent years, Dissh has experienced a surge in growth and found a global stage via being worn by celebrities including Emily Ratajkowski and Dakota Fanning. Dissh is expected to have hit around $98 million in sales, up from $62 million in revenue the previous year.

Like Rodd & Gunn’s move, this is also Dissh’s Melbourne shopping strip debut, following on from its stores in Bondi, on Sydney’s Northern Beaches, Indooroopilly in Brisbane, on the Gold Coast, Noosa, and Chadstone, while it has just announced expansion into Perth.

Waddell said High Street has also become a leading example of the renewal taking place across Melbourne’s shopping strips through development.

“The sharpening of High Street’s vacancy rate has coincided with a number of developments taking place on and around the strip over the last few years,” he said.

Several new developments have either just brought or are bringing around 115 new apartments to the immediacy of the strip, further underpinning the strong catchment and foot traffic. These are in addition to the recently-completed Alara project at 953-967 High Street, which as well as adding apartments has created a new food hub home to famous Sydney butcher Victor Churchill, popular bakery Ned’s Bake and Japanese salad purveyor Fishbowl, bringing another dynamic to High Street. Bookending the strip, Moda’s 835 High Street development has delivered world-famous Lune Croissanterie and boutique grocers The Leaf Store to the strip.

High Street has also become a favourite of investors. Like Church Street, few properties are put up for sale each year. Among the more recent sales, Fitzroys sold 1014 High Street for $3.525 million, on a sharp 3.4% yield and building rate of $25,178 per sqm.

“Like the tenants themselves, investors see the strong and affluent catchment that underpins trade, as well as the growth horizon offered by new developments,” Waddell said.