CBD leads the country in lowest retail shopfront vacancies

Empty retail shopfronts in the CBD have more than halved in the past year, new data from the City of Melbourne shows, with shopping, dining, sport, and international students driving foot traffic.

The report revealed that vacancies in the CBD’s retail district, from Queen St to Russell St, and La Trobe St to the Yarra River, dropped from 13 per cent to 6.5 per cent in the year to April.

The council’s positive data comes on the back of CBRE’s Australian CBD Retail Vacancy report in February, which showed the CBD was the best performing city in Australia.

Melbourne had recorded the lowest vacancy rate of 7.37 per cent, followed by Sydney at 8.1 per cent, Brisbane (18.7 per cent), and Perth (25.3 per cent).

“The return to office, coupled with increased tourism and international student inflows, has led to more foot traffic in CBDs, supporting occupier appetite for floorspace within these cities,” the report noted.

According to the council’s audit, published in April, retail vacancies across the municipality were down to 10.7 per cent. Carlton’s vacancy rate was steady over the past year, recording 11.1 per cent, while Southbank recorded 9.6 per cent, and North Melbourne, 10.4 per cent.

Vacancies were the highest in Docklands, but this area had experienced a significant improvement from 24.7 per cent to 18 per cent.

Consumer spending during weekdays throughout the municipality was tracking similar to 2019 levels while weekend spend continued to exceed pre-COVID levels – with the city’s economy accounting for 22 per cent of the state’s economic output.

The shopfront activation program was launched in September 2021 by the City of Melbourne in a bid to fill shops and reignite the city after the pandemic, which led to 67 shopfront activations.

The latest data was presented to the council’s June 11 Future Melbourne Committee meeting where councillors supported a recommendation from management to use the small business grant program to explore ways to reduce shopfront vacancy in retail districts most in need.

The council will also support the establishment of new businesses by adopting a Commercial Property Lookup, a web platform providing business owners with detailed property reports with the key information needed prior to signing a lease.

Melbourne Lord Mayor Sally Capp praised the shopfront activation program, saying “the numbers absolutely speak for themselves”.

“This program has very clear positive outcomes from the effort and investment that’s gone into the shopfront activation program, working with our partners, our team leading the way and importantly creating those pathways for more small business owners into participating in the city economy, which is absolutely fantastic,” Cr Capp said.

Artist Kristan Oud says the shopfront activation program has been pivotal to the success of his art gallery in the CBD. Photo: Hanna Komissarova.

Among the CBD’s successful shopfronts has been the opening of the Oud Arts Gallery at shop 4/945 Collins St, which displays the work of award-winning artist Kristan Oud.

“It’s been an amazing success, people from around the world have seen the work, bought it, and taken it back all throughout Europe, Asia, and America,” Mr Oud said after launching the gallery within the heritage icon building in December 2022, which is also home to the InterContinental Melbourne Rialto Hotel.

Mr Oud’s paintings and drawings document Melbourne as the “most liveable city in the world” after coming back to life after lockdowns, with a focus on sport, hospitality, and art.

“It’s an opportunity that I don’t think many artists get and it suddenly all happened overnight.”

Another success has been Mr.Cuff, a bespoke and custom menswear store, which launched three years ago in Howey Place with a second store opening in Docklands in May – with all garments and suits handmade onsite.

The store’s owner and tailor Jarrad Cuff said the program was a “gamechanger” after starting his business from making suits in a spare bedroom. •