Bridge Road Richmond’s retail strip has recorded its highest vacancy rate in five years, amid a prounced trend towards more vacant shops across Melbourne.
Bridge Road’s vacancy rate has risen from 2.9% to 11.5% over the past two years. Just five years ago the discount fashion shopping mecca had the lowest vacancy rate of 11 suburban shopping strips.
Property Observer counted 25 “for lease” signs along Bridge Road between Punt Road and Church Street over the weekend.
There were many more closing down sale signs. Some tenants, including Flight Centre, were relocating along the strip, but most exiting the strip.
Overall, the prime retail suburban vacancy rate in Melbourne had climbed from 3.2% to 5.3% over the past two years. Church Street, Brighton, had the lowest vacancy rate followed by High Street Armadale and Acland Street St Kilda.
Knight Frank’s retail survey, comprising 2,369 shops, found that the vacancy rate in Acland Street in St Kilda rose from zero to 3.7%.
Other results were: Burke Road, Camberwell, 2.8% to 7.2%; Clarendon Street, South Melbourne, 0.6% to 6.1%; Chapel Street, Prahran, 2.7% to 4.2%; Puckle Street, Moonee Ponds, 0.5% to 4.2%; Glenferrie Road, Hawthorn, 1.8% to 4.4%, with the Malvern end increasing from 2.8% to 3.5%.
Despite the rise in vacanicies, Knight Frank research analyst Rodney Wong says yields remained relatively stable.
Recent sales in Glenferrie Road and Chapel Street had sold with initial yields ranging between 3.5% and 4.5%, indicating prime retail assets were still sought after, particularly by private investors.
Wong acknowledged consumer and retailer confidence remained subdued after the impact of the federal government’s $2.8 billion household assistance package in May and June.
Sales of discretionary items of clothing and sales in department stores also fell, but turnover in cafes, restaurants and takeaway food outlets generally outperformed total retail sales.
Wong says the prime retail strips are still attracting global brands.