Amid the tightest social restrictions for Victorians to date, a number of retailers are committing to new leases in the Melbourne CBD to position themselves for the eventual rebound in consumer spending and trading conditions.
In a sign of confidence in the future of CBD retail, Cushman & Wakefield’s Melbourne retail leasing team has completed a range of deals in the discretionary retail space, with retailers seeking to maintain or expand their footprint and leverage favourable conditions to secure coveted retail locations.
Electronics retailer JB Hi-Fi, performing strongly throughout COVID-19, has taken up an extra 176 sqm at 245 Elizabeth Street, allowing them to expand their physical footprint at 243 Elizabeth Street and bank on increasing footfall throughout the CBD. Homewares wholesaler Sohum has been seeking to establish their retail presence in the CBD for some time, and recently leased 30 sqm in The Royal Arcade, a premium arcade running off the Bourke Street Mall.
Image: JB Hi-Fi. Source: Shutterstock
A number of other retailers are banking on a return of pedestrians to Melbourne’s retail hotspots, including pet goods retailer Danta Petz committing to 189 sqm at 261 Elizabeth Street, Lulu’s Kitchen growing into 31 Hardware Lane and fashion retailer Runway Secrets taking out 300 sqm at 88 Elizabeth Street.
Cushman & Wakefield’s Michael Di Carlo, Steve Makris, Stephanie Harding and Alexia Gatti managed the retail leasing deals on behalf of the various landlords.
According to Cushman & Wakefield’s research team, there is strong evidence retail will experience a substantial rebound once trading can resume. The latest ABS data shows a robust month-on-month increase during June in turnover for cafes, restaurants, and take-away food outlets (+27.9%) as trading restrictions eased in some states. A strong increase was also seen in clothing, footwear and personal accessory retailing (+20.5%).
Cushman & Wakefield’s Head of Retail Leasing Victoria, Michael DiCarlo, said: “Despite many bricks and mortar retailers grappling with forced trading restrictions, we continue to see examples of retailers taking advantage of favourable market conditions to position their businesses for the inevitable rebound. They are viewing it as an opportunity to maintain, expand or secure a coveted retail location.”
Cushman & Wakefield’s National Director, Research, Tony Crabb, said: “The latest ABS data clearly shows the magnitude of the rebound when restrictions ease. We can expect an element of pent up demand as people unleash their savings and domestic tourism fuels holiday expenditure on clothing and restaurants, and as CBD workers return to their place of employment.”
“It is clear the pandemic is having a significant impact not only in Victoria but around the country. The ability and desire of consumers to purchase clothing, footwear and personal accessories have been severely constrained. The lack of CBD workers in Melbourne has also had a marked impact on turnover in CBD locations, as has the lack of tourists and international students. Domestic tourists have also largely been absent.”