Melbourne looks set to join the ranks of fashion meccas such as Paris, Hong Kong, New York and London, as an influx of luxury brands vie to gain a presence in the city’s premier Collins Street retail precinct.
A new CBRE research report analysing Melbourne’s changing retail landscape highlighted a spike in the number of luxury retailers entering the market in 2014 and early 2015 – a trend largely attributed to the city’s growing tourism base.
CBRE Melbourne Retail Services Senior Manager, Zelman Ainsworth said that during the past 18 months, a flood of new retailers had arrived in the Melbourne central business district (CBD).
Since early 2014, no less than 18 international retailers have committed to secure a foothold on Collins Street, including Hermes, Dior, Longchamp, Gucci, Dolce&Gabbana, Ermenegildo Zegna, Coach, TAG and Christian Louboutin.
Ainsworth said: ““The number of retailers flocking to Collins Street is evidence of its growing appeal on the international stage, with Melbourne regarded highly in the global fashion rankings.”
Melbourne attracted the largest share of foreign retailer entry in 2014, accounting for 18 of the 37 brands that opened doors for the first time, pre-committed leases or expanded in CBD markets.
Ainsworth said unmatched demand from luxury retailers wanting to secure a retail space on Collins Street continued to push up rentals to record levels and maintain a 0 percent vacancy rate.
“The luxury retail mandate is no longer limited to the traditional Paris end of Collins Street between Swanston and Exhibition streets, as the demand has now truly surpassed the supply,” he added.
“This retail demand is on the back of impressive turnover figures being reported by the existing international brands on Collins Street. In some cases, Melbourne is achieving the highest turnovers globally.”
He said: “Melbourne has undoubtedly become a global city, with major retailers requiring a flagship presence in Melbourne if they are to compete at an international level.”
CBRE Research Analyst Philippa Bordonaro said rising international visitor numbers to Melbourne, boosted by the lower Australian dollar, was supporting the growth in high-end retail.
“Foreign tourists have a greater appetite for luxury items than domestic visitors, which is in turn supporting growth at this end of the market,” she said.
“A number of redevelopments across the CBD are rejuvenating the city, making Melbourne a highly attractive retail destination. Melbourne is likely to continue to see a growing number of foreign brand entrants and expansion plans rolled out over the next few years, with luxury brands targeting prime locations in the CBD.”
Bordonaro said over the next five years, Melbourne would continue to see an influx of foreign retailers, driven by the rise in global wealthy, foreign tourist arrivals and CBD retail development catering for foreign brands.
The number of Chinese tourists visiting Melbourne in 2014 increased 13.4% percent year-on-year.
“With Melbourne attracting 365,400 Chinese tourists in 2014, the city is positioned to capitalise on the increased appetite for luxury brands. Chinese tourists are spending more on shopping than any other group, and this is likely to continue as the middle class wave moves through its population,” she concluded.
Image: Collins Street by Bidgee. This image is licensed under the Creative Commons Attribution 3.0 Unported license.
