This article is from the Australian Property Journal archive
STRUGGLING businesses within the Melbourne CBD are capitalising on global retailers seeking to secure prime locations, according to CBRE.
Associate director Max Cookes said the rapid increase in prime rentals over the past five years had created an opportunity for struggling businesses, particularly small to medium food and fashion retailers, to sell their long term lease to another tenant.
“In most cases the existing rental will be below market which provides an added advantage for the incoming tenant, which they are prepared to pay for upfront.
“We are fielding interest from a number of national and international retailers seeking to secure high profile CBD locations, who are comfortable with purchasing a lease from a sitting tenant,” Cookes said.
In a recent example, Cookes and Zelman Ainsworth negotiated a retail lease on behalf of the Ten Ren Tea Company at 147 Swanston St to the Taiwanese based desert retailer Meet Fresh, which recently expanded into Australia after opening its first store in Sydney 18 months ago.
Ainsworth said the team had been involved in a number of other lease assignments in the retail core of the Melbourne CBD over the past 18 months.
Most recent lease assignments include;
· 146 Swanston St with Sydney based retailer Pie Face opening its 15th store in the Melbourne CBD.
· Temelli Jewellery assigned its lease at 259 Collins St
· LIFE with BIRD took over the lease at 241A Flinders Lane
· Lorna Jane was assigned the lease at 267 Little Collins St
· Cone Heads took over the lease at 2 Elizabeth St
· the UGG Store assumed the lease at 167 Swanston St.
Cookes said the level of underlying demand from retailers keen to secure space in the Melbourne CBD is evident in the large rentals recently achieved and the increasing number of lease assignments.
“Over the long term we expect rents will continue to increase, regardless of the new supply coming onto the market,” he concluded.
Property Review
