International retailers driving down vacancies

International retailers driving down vacanciesInternational retailers are boosting Sydney and Melbourne markets, driving CBD vacancies downwards and sending existing retailers to secondary locations, finds Knight Frank’s latest retail market briefs.In Sydney, vacancies have trended down in the CBD retail core over the past 18 months, declining to 3.3 per cent in July 2015 from 4.1 per cent in January 2014. According to Knight Frank’s senior director of retail leasing in Sydney, Alex Alamsyah, international retailers taking up prime retail space has been the main catalyst for the down-trending of vacancies, forcing some existing retailers to look beyond the super prime retail core.”Examples include UNIQLO’s occupancy of the MidCity Centre in Pitt Street Mall, which prompted 18 retailers to look for alternative premises, while the opening of Forever 21, also at Pitt Street Mall, meant that three major retailers went elsewhere for new premises,” Alamsyah says.Alamsyah says international retailers are likely to continue to have a major bearing on the Sydney CBD retail market for the foreseeable future.”Significant capital remains in the Sydney CBD retail market, with first-half 2015 retail strata sales totalling $66.1 million. This is in comparison with $30.9 million during the first half of 2014,” Alamsyah adds.In Melbourne, vacancies have trended slightly up over the past 12 months, with total Melbourne CBD retail core vacancy at 3.2 per cent in July 2015 in comparison with 3.0 per cent in July 2014 – with prime and secondary vacancy rates diverging.According to Knight Frank’s director of retail leasing for Melbourne, Gary Loo, the slight increase in retail vacancies over the past year has been driven by some tenants choosing to relocate to the inner suburbs, seeking larger premises with a lower rent. “However, availability of prime street-front shops remains low, with vacancy in the super prime precinct of Bourke Street Mall falling from 5.4 per cent to 0.”Clothing and food retailers account for 57 per cent of occupied CBD core retail shops in Melbourne. The total number of international retailers in the Melbourne CBD retail core has increased to 119, up from 65 traders five years ago. To read the Knight Frank research click here.