This article is from the Australian Property Journal archive
RENTS in the Elizabeth St precinct of Melbourne’s CBD has risen to unprecedented levels as businesses flock to the strip in response to the boom in student accommodation and residential developments.
Fitzroys’ Alex Shum and Terence Yeh have leased the 200 sqm double-fronted building at 423-425 Elizabeth St to a dessert house chain from mainland China.
The deal was struck at a record $400,000 per annum net on a 10-year term.
It was the first time in more than four decades the property had become available, after long term tenant Spot On Motorcycles relocated to North Melbourne.
Shum said the property attracted close to 100 enquiries from food and beverage operators.
“The location is well supported by the surrounding student accommodation buildings and complimentary Asian food businesses in the strip, and its position is a busy location close to the Queen Victoria Market, Melbourne University and RMIT University.”
Yeh said that there are a number of experienced business owners still actively seeking similar spaces in the area following the campaign.
“The long-term deal reflects the confidence business have in the growth prospects of the Melbourne CBD’s northern precinct.”
In recent months, international Chinese restaurant chain Orient Hot Pot took up the nearby 55-59 A’Beckett Street property formerly occupied by electronics specialist Jaycar; Da Yong Li has opened at New Life Hot Pot opened at 470 Little Lonsdale Street. They join Asian based operators Shujinko Ramen, Hot Star Chicken, Gong Cha, Torosan Ramen, Nene Chicken, Sushi Hub and renowned Chinese BBQ restaurant Rose Garden in the area.
Established operators looking for space has extended to Hungry Jack’s, which Shum and Yeh recently leased 500sqm at 260 La Trobe Street – on the busy corner of Elizabeth Street – for its new CBD flagship site. The space had been tenanted by Endeavour College for 20 years.
Hungry Jack’s agreed to a 15-year lease within the A-C Building at $700,000 per annum gross, winning out from competition that heavily featured Asian-based operators in another example of businesses looking to take advantage of the area’s growth.
There is an estimated 12,000 apartments being constructed in the area, and the pipeline of new purpose-built student accommodation projects nearby in the city includes a 300-unit development by Singaporean group Wee Hur at 185 A’Beckett Street, and Scape Student Living’s 61-level, 800-bed tower at 97 Franklin Street,
On the city’s northern fringe, Scape has just purchased 558-566 Swanston Street with a permit for a 159-apartment tower, near its 650-bed 557 Swanston Street development on the former CUB site.
Last year, Fitzroys leased two spaces within 360 Bourke Street, on the corner of Elizabeth Street and directly opposite the GPO building, demonstrating the generational retail change on Elizabeth Street was pushing further south.
International beauty services clinic Kinly Eyebeauty signed up for a 756 sqm part-ground floor, part-level one space at $600,000 per annum gross; while Shanghai Street Dumplings expanded to its sixth store after agreeing to a 10-year deal with a five-year option across 400 sqm on level 1 at $200,000 per annum plus outgoings and GST.
Australian Property Journal
