Vacancies up in Melbourne retail

Vacancies up in Melbourne retailThe latest research by Knight Frank indicates that retail vacancies are on the rise in Melbourne’s iconic shopping strips – and that the popularity of CBD shopping is largely to blame.All of Melbourne’s iconic shopping strips are struggling with spikes in vacancy rates, according to Knight Frank’s new research. One in every five shops along Bridge Road, Richmond is now vacant – the strip’s highest rate of vacancy in a decade. Vacancy in Burke Street, Camberwell, rose from 6.0 per cent a year ago to the current rate of 9.5 per cent, while those along Chapel Street, South Yarra increased from 6.1 per cent to 8.4 per cent in the same period. Both streets’ vacancy rates are at five-year highs.The Knight Frank research found that some areas bucked the trend. The vacancy rate in Toorak Road, South Yarra, dropped from 12.8 per cent to 7.7 per cent, while Church Street, Brighton, exhibited a very low vacancy rate of 1.1 per cent; however, these shopping strips and others such as High Street, Armadale, Acland Street, St Kilda and Puckle Street, Moonee Ponds, are generally considered to be smaller shopping precincts.The rise in the popularity of shopping in the CBD, led by the recent opening of the premium Emporium Melbourne shopping complex, is one factor contributing to the rise in vacancies in the city’s traditional shopping strips. Melbourne’s prime CBD retail market currently has a vacancy rate of 3.0 per cent, while the shopping strips’ average rate sits at 7.7 per cent. Soft consumer sentiment and the increasing popularity of online shopping are also cited as factors.The Knight Frank research does offer some cause for optimism. With many apartment developments close to the retail strips in the pipeline, rising local populations may help tip the balance in the near future. Couple this with the dearth of opportunities for tenants elsewhere in the city and it seems there’s still competition for prime locations in the traditional retail strips.Retail sales of clothing also appear to be increasing on the back of increasing house prices and an improving economic outlook. Garment retail sales grew by 15.2 per cent in the 12 months to June.