New research from CBRE finds Melbourne CBD retail vacancy rates remain tight, compared to other Australian retail hubs – with international fashion and food retailers driving expansion in the Victorian capital.
Max Cookes, CBRE retail sales and leasing associate director, says leasing deals have recently been concluded with international retailers across the fashion, luxury and banking sectors.
“Although retail leasing deals are taking more time to conclude as most tenants are acting far more cautiously, there is still a strong level of demand from international retailers for quality CBD retail shops,” Cookes says.
Ed Wright, CBRE city sales negotiator, says investor demand for retail assets in Melbourne also remains strong.
“Demand from investors, particularly from off shore investors, has remained strong with average retail yields at 5.25 percent. This demand has been further fuelled by the increased buyer interest from self managed super funds, with many ‘mum and dad’ type investors shying away from residential properties and looking to purchase well located and leased CBD retail through SMSFs”, Wright says.
CBRE’s Melbourne CBD Retail Report Q2 2012 also shows rents within Melbourne’s CBD have stabilised over the first half of 2012.
Street frontage vacancy within Melbourne’s CBD rose slightly to 2.4 percent over the June quarter, it was previously 1.6 percent at March 2012.