CBD rent growth surges
The Age
Wednesday March 30, 2011
DEMAND for shops is driving big rental growth in Melbourne's CBD, with rents having jumped by 10.6 per cent for super-prime property since the start of last year, according to CB Richard Ellis.Rents for prime property rose by 5.5 per cent over the same period, with growth of 8.8 per cent in secondary locations.CBRE's senior manager, retail services, Max Cookes, said strong local and global tenant interest was underpinning rental growth. CBRE's retail services team recently concluded two lease deals in Swanston Street.The first involved 77 Swanston Street, leased to Taiwan tea retailer Chatime. The 52-square-metre shop was leased at $285,000 a year, plus outgoings and GST, which translates to a rate of $5480 a sq m. In a second deal, the lease over the 146 Swanston Street space occupied by Ten Ren's Tea has been assigned to national retailer Pie Face. The existing lease for the 99 sq m shop was assigned at a passing gross rent of $220,000 a year plus GST.In the Melbourne CBD over the past year, national fashion retailer Pierucci gave up its Little Collins Street store to Lorna Jane; White Moss assigned its lease in Flinders Lane to Arabella Ramsey; and the Pacific Restaurant Group assigned its Flinders Lane lease to new restaurant group Papa Goose.Mr Cookes said the trend allowed retailers to recover part of their initial capital outlay in their fitout from an enthusiastic incoming tenant.
© 2011 The Age
