Retailers target Swanston Street as prime CBD strip undergoes transformation

Colliers International inundated by demand from brands unfazed by major construction

The Swanston Street retail strip is in hot demand from forward-looking brands competing to be part of this prime pocket of the Melbourne CBD as it undergoes a once-in-a-generation evolution. 

According to Colliers International retail leasing specialist Stephanie Harding, retailers are bucking predictions of sluggish sales and reduced foot traffic as a result of construction on Swanston Street as part of the Metro Tunnel project.

“Initial predictions were for significant distruption for retailers throughout the course of construction on the Metro Tunnel project,” Ms Harding said. “However, the demand and activity we are witnessing along this prime retail strip tells a different story.

“Construction might be well underway, but retailers are swarming to secure a slice of Swanston Street as they look ahead to the future. Far from being turned off the area while it undergoes its transformation, retailers can see the benefit in being part of a new-look Swanston Street, which will offer even more foot traffic and public transport connectivity.

Demand was coming from both local and national retailers, further fuelled by the spread of student accommodation in the Melbourne CBD and development at the northern end of the CBD driving rents. 

For example, Colliers International recently secured two new tenants at 393 Swanston Street – ChaTime (32sqm) and Ezymart (71sqm) – following a strong contest for these spaces. 

“Rents in this area are currently being negotiated up to circa $6,500/sqm, which is a prime example of the strength of this market,” Ms Harding said. 

“Down the road at 242 Swanston Street, we have leased a 180sqm tenancy to Top Tea within four weeks. This has been our strongest campaign to date this year, without question, with more than 150 enquiries in a very short period.”

Ms Harding said the northern end of the Melbourne CBD had become one the most densely populated CBD pockets in the world. 

“With increased traffic from the future CBD North Metro station as well as the nearby RMIT University and Melbourne Central shopping centre, tenants are confident in the future performance of this end of the CBD, and Swanston Street more broadly,” she said.
 
“There are more than 40 developments and 10,000 residential dwellings that are close to completion or approved for development in this section of the city. The growing population has created the opportunity for retailers to trade 24 hours a day, seven days a week.

“We’re seeing an influx of new-to-market and existing international tenants, including Chunky Town, Miniso, Go Noodle House, Siye Noodle, Tealive and Goodme Chicken all hunting for CBD retail space.”