Colliers International lists iconic Melbourne CBD retail front for first time in more than 40 years
After almost half a century, Melbourne institution Kozminsky jewellers closed its doors at 421 Bourke Street on February 10.
Colliers International retail specialists Cam Taranto and Jarrod Herscu are handling the international retail leasing campaign on behalf of the well-known private landlord.
“With retail vacancies within the Melbourne CBD core tightening up year-on-year and currently sitting at about 2.4 per cent, we are seeing further expansion and rental growth through all other sectors of the CBD retail scene,” Mr Herscu said.
Mr Taranto said Colliers International was expecting large enquiry driven by hospitality operators, which comprised about 80 per cent of deals in 2016.
“We are seeing super hospitality groups, both national and international, including Urban Purveyor Group, PTT Family, Dixon Hospitality, The Publican Group and Seagrass Boutique Hospitality Group, all looking to expand rapidly and even looking to acquire other businesses to gain market share,” he said.
“This was the case with Urban Purveyor Group acquiring Neil Perry’s Rockpool and Dixon Hospitality acquiring The Keystone Group in late 2016,” he said.
Colliers International will also be targeting the beauty industry in its campaign, which Mr Herscu said was one of the strongest-performing segments in the market, as well as jewellery, fashion and accessories.
“Along Bourke Street Mall, we are seeing a huge influx of enquiry from international brands, including Apple, Google, Victoria’s Secret, Kit and Ace, Suitsupply, Rag & Bone, West Elm and COS, all looking for their first Melbourne CBD flagship or additional space,” Mr Herscu said.
“In addition, due to low vacancy rates, a growing CBD population and strong retail-trading conditions, we are seeing record rentals in the Melbourne CBD.
“The latest deal is a new flagship joint venture between international brands Nike and Footlocker (Hoops), which are paying approximately $10,000 per square metre, a new rental benchmark for a non-corner site in the mall.”
Mr Taranto said the tightly held vacancies and continued population growth had presented opportunity for developers to expand the retail footprint within the Melbourne CBD.
“Two projects that have been in the pipeline for some years, 405 Bourke Street and 150 Queen Street, will include a new retail arcade, offices and apartments sitting on either side of the Kozminsky building and on the outskirts of Bourke Street Mall,” he said.
“Within the northern part of the Melbourne CBD, multi-storey residential developments are shaping a new Melbourne lifestyle. It is slowly becoming the most densely populated pocket in Australia, with more than 3,971 new apartments currently under construction.”
Mr Taranto said that as the retail landscape changed, tenants were looking for spaces that offered long tenor and the opportunity to create their own identities through securing heritage-facade buildings.
“H&M did this on a much larger scale when it secured the GPO, which is now considered a landmark location in the Melbourne CBD,” he said.
“Along Collins Street, this is very common among the luxury brands, such as Chanel, Hermes, Louis Vuitton, Longchamp and Prada, which all have taken long leases on heritage-facade buildings to establish their unique brands.”
Mr Herscu said 421 Bourke Street presented “an invaluable opportunity for a new tenant to take advantage of the corner location of a Melbourne CBD icon”.
“This elegant building has a long association with the livestock and real estate industry in Melbourne’s early days and the banking boom in its later days,” he said.
“It now rings the successful association of Kozminsky, who operated in the building for more than 40 years.
“Colliers International is extremely excited to run this unique leasing campaign to determine the highest and best use for a retail building with a storyline dating back to 1869.
“We have no doubt the new tenant will be able to enjoy as much success as its predecessor.”