Melbourne’s Shopping Strips Demonstrate Their Resilience
Melbourne’s shopping strips have demonstrated their resilience throughout the biggest crisis the city has faced in decades.

Working from home and a sudden surge in demand for takeaway and delivery food services has helped support activity in Melbourne strips throughout multiple lockdowns during the COVID period, according to Fitzroys’ 2021 edition of Walk the Strip.

“The COVID period reinforced the role of the iconic neighbourhood strips as a place for Melburnians to connect with their local communities while the city endured multiple lockdown periods,” Fitzroys Director, David Bourke said.

“Melburnians love their local villages. They have reinforced their position as the heartbeat of their local communities over the past 12 months,” Bourke said.

“During COVID – particularly during periods of localised travel restrictions – the shopping strip became something more than a place to run errands and do the shopping. They were the place to go to get a coffee, to meet friends for a walk, or to break up the day while we were working from home.”

While a reduction in the proportion of specialty and service retailers contributed to the empty stores, the food and beverage sector increased its presence across the strips, growing in 64% of the precincts, by far the best performing sector. Specialty retail, which includes fashion, homewares, and other discretionary shopping, increased in just 36% of strips, and service retail – hair and beauty salons, gyms, and medical – in 27%.

Vacancies increased on average by 2.6% across nearly 35 of Melbourne’s major shopping strips (from 7.7% heading into COVID to 10.3% currently), with a broad
variation of performances.

Church Street, Brighton retained its status as arguably Melbourne’s – and perhaps Australia’s – most highly-regarded shopping strip. Its vacancy rate is just 0.7% - the only available shop is an assignment of lease. New entrants including Assembly Label, Store Chance and Oroton took the proportion of specialty tenants to nearly 58% – some 6% higher than it was 3 years ago, and the highest fashion and discretionary retail proportion of any strip in Melbourne.

Puckle Street, Moonee Ponds is returning to its glory days as one of Melbourne’s most prominent shopping strips, posting a low 4.6% vacancy rate that is nearly half of what it was in 2019.

Centre Road, Bentleigh meanwhile, is a key example of growing supermarket sales driving custom to shopping strips during the lockdowns, and maintaining some trading momentum throughout the 2020. The strip is anchored by Woolworths, Coles and Aldi. It has also been a beneficiary of level crossing removal, which has freed up traffic flow through the strip. Its vacancy rate has come down to 5.3%.

Smith Street, Collingwood (5.1%) was a beneficiary of the trend towards working from home and flexible working arrangements that has spurred office activity across accessible locations in Melbourne’s inner suburbs that also have a quality hospitality and lifestyle at their doorstep. Swan Street, Richmond (6.4%) also retained low vacancy.

Glenferrie Road, Hawthorn managed to stay steady throughout the period. While vacancies lifted around 5% to double digits in the 12 months heading into COVID, the strip managed to weather the absence of Swinburne University students with a hefty take-up of food and beverage operators, and holds healthy prospects given the suburb’s growing office market and the pending return of in-person classes.

Toorak Village saw one of the best improvements in vacancies (down 2.6% to 5.0%) with an affluent and white collar workforce that stayed at home supporting the strip. Similarly, Malvern Road, Toorak – better known as Hawksburn Village - was also low (5.3%), and below its longer-term average.

Despite being one of the better performers heading into the COVID period, Acland Street, St Kilda was impacted by COVID-enforced travel restrictions most deeply. The backpacker and tourist playground saw vacancies jump from 6.4% to 14.6%. It was among the 73% of strips that saw an increase in vacancies – however, these varied from negligible amounts in strips with healthy vacancy rates (such as Bay Street, Brighton, which lifted by less than 1.0%) to the more notable (the west end of Bridge Road, Richmond lifted 9.3%).

Fitzroys Associate Director – Leasing, James Lockwood, said retail strips continue to be honest reflection of the retail landscape.

“This is another chapter in the ongoing stories of Melbourne’s shopping strips,” Lockwood said.

“The nature of property ownership throughout the strips means they reflect where retail and its different forms are at a certain point in time, more so than shopping centres. Shopping strips have much more scope to develop their own character and personality. They reflect their demographic and their communities, and people see their communities in their shopping strips.”