The proposed Van Cleef & Arpel store at 112 Castlereagh Street, leased as retail vacancy rates fall. Photo: suppliedFinding a retail site in capital cities is getting that much more difficult as international retailers and banks jostle for space, according to Knight Frank’s directors.
The latest data shows that street frontages experienced the tightest vacancy level as well as the largest yearly decline, with the vacancy rate contracting to 1.5 per cent as at July this year from 3.5 per cent a year earlier.
And the influx of luxury retailers is showing no sign of slowing in Sydney, with the likes of Chopard setting up a flagship store at the newly redeveloped building at 119 King Street.
Knight Frank’s senior director, retail leasing, NSW Alex Alamsyah said, other major luxury flagship deals in Sydney secured by Knight Frank include upmarket jeweller Van Cleef & Arpels, which is anticipated to open at 112 Castlereagh Street, Cartier, and Franck Muller, which opened last year.
“However, while demand from luxury international retailers has been strong, there has been an engagement of banks in the Sydney CBD retail market,” Mr Alamsyah said.
“The trend is evident by NAB and HSBC pre-committing to 333 George Street, which topped out during the week, and at least six more major international banks searching for prime sites in the CBD. This is on the back of the ANZ repositioning at 20 Martin Place.”
The high demand has also led to strong rents for the landlords.
The anticipated redevelopment of the David Jones store at 77 Market Street by the new owners, Scentre Group and Cbus, could include space at ground level for a new retailer and it has been suggested many are keen to sign up if it’s available.
With properties being sold across the city, some tenants, such as Tiffany & Co will be looking for a new site. The upmarket jeweller has appointed CBRE to advise on its move.
There is also the planned redevelopment along King Street, opposite the new Chopard store, which could be attractive for well-known brands and new retail entrants.
“In Sydney, for premises outside Pitt Street Mall, being George Street and Castlereagh Street precincts, gross rental rates currently average between $5000 per square metre per annum and $7000 per sq m per annum, an average increase of 9.1 per cent over the past 12 months,” Mr Alamsyah said.
“Gross retail rentals in the super-prime retail core, encompassing Pitt Street Mall, now average prime rents between $10,000 per sq m per annum and $17,000 per sq m per annum, an increase of 8 per cent over the past 12 months,” he said.
“Whilst leasing activity in 2014-15 was dominated by international fast-fashion retailers, 2015-16 has seen luxury and upmarket international retailers and banks driving demand. A number of local players have also upgraded their stores in the CBD.”
This story Administrator ready to work first appeared on Nanjing Night Net.