New “Collins Arcade” is coming to Melbourne’s CBD

CBD retail precinct 260 Collins St will reopen in October this year under a new name, “Collins Arcade”.

The site’s internal arcade between Collins and Little Collins streets closed in September 2024 for 12 months, with Buildcorp responsible for leading its $50 million repositioning.

With more than 75 per cent of the precinct’s high-profile retail already having been leased, Toby Daniel the joint managing director of the project’s developer Kaipara, said Collins Arcade would “reclaim this property’s prominence in Melbourne’s CBD”.

“We have extreme confidence in the Buildcorp team’s ability to deliver a project of this scale, complexity and importance,” Mr Daniel added.

Melbourne’s CBD has seen a significant rebound in footfall in recent months. According to CBRE’s report on Melbourne’s CBD retail vacancy, there has been a 0.85 per cent to six per cent tightening in the second half of 2024, which is the third consecutive decrease.

Australians spending on 2024 Boxing Day is up 1.8 per cent on last year to $1.3 billion, revealing the recovery of consumer spending and Melbourne’s retail sector.

Collins Arcade has introduced new tenants with long leases to inject vitality into the existing retail stores.

“We’re continuing to see landlords actively invest in their existing assets. This focus on upgrading and revitalisation is expected to deliver positive outcomes as significant retail development projects near completion later this year,” CBRE’s director of retail leasing Jason Orenbuch said.

“As a result, we expect to see tenants in the CBD become more proactive in their leasing decisions and push vacancy down even further.”

Priceline Pharmacy has signed a 10-year lease to anchor a health and wellness precinct on Level 1 as a new deal and is set to join with ASX-listed Healius Groups, which will open a pathology clinic. It will take the final step in negotiating the commitment of the health and wellness offering with complementary hair, beauty and wellness.

Other transactions include leading fashion retailers MJ Bale and SABA, which will join the existing ground-floor flagship tenants, TAG Heuer, Swatch, and Birkenstock, all of which continue to trade during the redevelopment.

Agreements have been reached with five additional food, wellness and athleisure and sport retailers, in addition to the previously announced coworking provider, Waterman Workspaces on Level 2, and Kingpin, which has leased the basement level.

These recent additions brokered by Zelman Ainsworth of Ainsworth Property will reposition a vibrant retail, workplace, dining and entertaining destination to this prime location of Collins St.

The reopening of Collins Arcade will coincide with several major developments in the area, including the new Town Hall Metro station, which is in close walking distance of the precinct, and the new Holiday Inn and Indigo Hotels.

Global design practice Buchan redesigned the precinct to enhance the customer and retailer experience, creating a more authentic “Melbourne feel” while re-establishing a strong connection between Flinders Street Station and Bourke Street Mall.

“Leasing demand has continued to strengthen as tenants see the vision of Collins Arcade materialising together with the Melbourne CBD rebound to exceed pre-pandemic sales and foot traffic levels,” Mr Daniel said.