Overall, the metropolitan strip vacancy rate fell from 3.5 per cent in the March quarter, to 2.8 per cent in June, according to Knight Frank’s latest Prime Strips Overview report.
“Bridge Road suffered a spike in vacancy last year as a result of the new DFO in Spencer Street,” said Knight Frank retail leasing and sales executive Jamie Perlinger. “Since then however, the strip has attracted a number of independent fashion outlets. Vacancy fell from 3.91 per cent in March to 0.87 per cent today.”
“This is Bridge Road’s lowest vacancy rate in several years and the lowest of all strips covered.”
“Fashion retailers now account for 73 per cent of the tenant mix in Bridge Road, with new tenants including Easy Tiger, Creswick and Charmie,” said Mr Perlinger. “It seems anywhere there’s a high proportion of fashion, vacancies are generally low.”
Burke Road in Camberwell was the only other strip to record a sub 1 per cent vacancy, staying steady since March at 0.97 per cent. It was followed by Acland Street St Kilda (1.01 per cent), Church Street Brighton (1.27 per cent) and Glenferrie Road Malvern (2.02 per cent).
Chapel Street came in sixth position, recording a vacancy rate of 2.17 per cent, down from 2.77 per cent in March. “Chapel Street has the second highest proportion of fashion retailing at 52.1 per cent of the total,” said Mr Perlinger.
The strips with the highest vacancy include High Street Armadale (3.77 per cent) and Toorak Road South Yarra (7.47 per cent). The only strip to record to a rise in vacancy was Puckle Street in Moonee Ponds. Vacancy in the precinct increased from 3.79 per cent in March, to 4.88 per cent in June.
Mr Perlinger says that vacancy levels of less than 5 per cent are considered healthy for prime suburban strips.
“In terms of rents, Chapel Street South Yarra still commands the highest at up to $1300 per square metre, while nearby Toorak Road was amongst the cheapest, averaging between $400 and $700 per square metre.”
According to Mr Perlinger, tenants wanting to get into the bourgeoisies south-east suburbs, still elect for stores on Chapel Street over Toorak Road.
Knight Frank research says investors shelled out $69.9 million retail property strip assets in the 2006/07 financial year. This compares with $20.5 million recorded for the previous year.
“Strong tenant demand, and low vacancies are continuing to attract private investors to suburban strip retail,” said Knight Frank research analyst Randy Jayakody. “This competitive environment is seeing yields consistently in the 3.5 per cent to 4.5 per cent range”