This article is from the Australian Property Journal archive
HIGH end prêt-à -porter youth wear label Diesel has stitched together a 10-year lease at Chapel St South Yarra, as retailers return to the chic and hip precinct, which was hit hard by the global financial crisis.
Real estate agents, Fitzroys city retail team signed Diesel to 434 sqm of space at 501-503 Chapel St, on the corner of Fitzgerald St. The building is currently home to long-standing retailer Dakota 501, as well as Flight Centre.
Fitzroys city retail senior manager Charles Emmett said the deal is another good sign for the precinct, which has been through a healthy readjustment over the past five years.
He added that approximately 25% to 30% of retailers who were present pre-GFC have since exited Chapel St.
“However, that adjustment phase is now complete with the street housing a refreshed and dynamic mix of higher quality and better suited retailers. The enquiry our team is now fielding for Chapel St leasing campaigns is from a far more optimistic and confident group of retailers compared to two years ago, with many having adopted more aggressive and edgier strategies.
“Many more are now keen to get into the street as evidenced by the tight level of competition for 501-503 Chapel St,” he added.
Emmett said the low vacancy rate now evident in the prime section of Chapel St is testament to street’s long term sustainability as one of Melbourne’s premier discretionary retailing destinations.
“This landmark deal reinforces the Chapel Sts prominence as a major discretionary retail location alongside the Melbourne CBD,” he continued.
Fitzroys city retail leasing executive Michael Rainey said there had been six other offers for the landmark corner site from a range of international and national retailers, including two of the major international fast fashion retailers.
“The leasing campaign drew to a close after a short campaign of just three months,” he said.
Emmett said the Diesel leasing follows Fitzroys’ brokering of popular clothing outlet Bonds for 514 Chapel, across the road from Diesel’s new space, and US retailer Williams Sonoma’s brand “West Elm” entering the strip, having earmarked Chapel St for their first flagship store in Australia.
Other national and international retailers have recently secured space in the precinct, including UK men’s fashion group Peter Werth; Scandinavian retailer Marimekko; Glasson’s subsidiary Storm; Sydney fashion retailer Manning Cartel; Windsor Smith; and Roy Christou’s new venture Honour Among Thieves.
Fitzroys indicated that rents along Chapel St vary widely within the prime section, between $1,000 and $2,000 per sqm.
Diesel managing director Sanjay Jain said the deal follows the total #REBOOT of the Diesel brand worldwide, starting with the hiring of Nicola Formichetti as artistic director and the total brand #REBOOT from the store image, to the new collections, to the new marketing campaigns and Diesel’s new partnership here in Australia.
“These are exciting times for the new team at Diesel in Australia. With a strong strategy of marketing and retail expansion in place there is no doubt that Diesel, while always retaining its DNA, will position itself again as the true alternative to the established luxury market,” Jain said.
Property Review
