Toorak and Bridge roads struggle with high retail vacancy rates

Retail vacancies on two of Melbourne’s prime retail strips have risen to almost twice the average across the prime street market, according to the latest Savills research.

More than one out of every 10 shops in upmarket Toorak Road, South Yarra (11.4%) and discount street Bridge Road, Richmond (10.6%) sits empty, compared with a prime street vacancy rate of 6% across Melbourne.

Toorak Road, South Yarra has proportionally fewer fashion retailers (24%) than the average for Melbourne prime retail strips of 31%.

It has no major anchor tenants, though supermarkets are to be found in adjoining Chapel Street.

Toorak Village Traders’ Association president Tony Fialides expressed concerns about rundown shopfronts in July, telling Melbourne Weekly shopping strips needed council-funded upgrades to keep them competitive with major shopping centres.

Fialides says shops particularly on the south side of Toorak Road have moved due to a tough market, and the council, landlords and retailers could do more to improve streetscapes and boost traffic.

Currently seven properties are listed on realcommercial.com.au as up for sale on Toorak Road, South Yarra, ranging in price from $750,000 to just over $800,000 for shops of about 45 square metres.

There are currently vacancies in the upmarket Como Centre at 299 Toorak Road, and a 45-square-metre shop at 210 Toorak Road is being offered for rent at $550 per week by Dixon Kestles.

In the Melbourne suburb of Richmond, Bridge Road is heavily reliant on fashion retailers, with 38% of shops on the strip operating as clothing stores. Coles occupies space in Richmond Plaza on the street.

Shops for lease on Bridge Road include a 47-square-metre site at 116 Bridge Road for $52,000 per year by Alex Teneketzis from TCI Property Consultants.

Four retail locations on Bridge Street are listed for sale on realcommercial.com.au – none include listing prices.

In the December quarter of 2010, CBRE noted that the number of retailers offered incentives had increased on both Toorak Road, South Yarra and Bridge Road, with both strips affected by the downturn in the fashion sector.

Vacancies rates on Australia’s most fashionable suburban strip, Chapel Street, remain low at 3.8% despite the fashion downturn, while higher up in Toorak Road in Toorak village, vacancy rates are at 6.5%

The tightest prime street retail markets are Glenferrie Road in Hawthorn, six kilometres east of the Melbourne CBD and Puckle Street in Moonee Ponds, seven kilometres northwest of the Melbourne CBD. Vacancies rates are at 2.1% for both locations.

According to Savills, retailers in street locations have started to rethink their offerings and have aggressively started to renegotiate their rents.