Pop-up shops on the rise as Melbourne retail vacancy rate falls: CBRE

Pop-up shops helped plug rental gaps in 2011 as Melbourne experienced historically low retail vacancy rates in 2011, according to a report by CBRE.

Melbourne’s retail vacancies hit record lows as short-term spontaneous shops filled vacancies.

Pop-up shops are shops that exist for just a short period of time, usually weeks or months.

Vacancies across Melbourne’s top 10 retail strips fell to 3.5% over the second half of 2011, found CBRE’S Melbourne Retail MarketView.

Bridge Road experienced the greatest drop in vacancies, falling to 2.7% after the leasing of 10 shops, four of which were tenanted by pop-up stores such as Spring Clean Shop, run by the Brazillian Melko boutique.

Pop-up stores also appeared on Acland Street and Chapel Street in the second half of the year, helping to drive down vacancies in both precincts.

They give the retailer the opportunity to test the waters without the overhead of a longer-term lease and give landlords the opportunity to fill a gap in vacancy.

“The benefit for retailers is they can trade in an established shopping precinct for a low upfront cost while testing the market or clearing excess stock,” says CBRE associate director of retail services Max Cookes.

“At the same time landlords benefit by avoiding vacancy while letting tenants try before they buy or while waiting for the right long-term lease deal or concept. The concept has also be embraced by the likes of Celine Victoria, which pops up in the Melbourne CBD in the lead-up to Spring Carnival to sell its sought-after range of hats and fascinators.”

The report finds pop-ups have enjoyed increasing popularity as retailers and landlords focus on new marketing and brand initiatives in a challenging retail landscape.

Cookes says the concept is targeted towards the youth market, as young people like the spontaneous nature of a retail “event”.

Retail analysts have dubbed the shoppers who flock to pop-up shops as “transumers”.

The report looked at the Melbourne shopping strips of Acland Street, St Kilda; Bridge Road, Richmond; Burke Road, Camberwell; Chapel Street, South Yarra; Church Street, Brighton; Clarendon Street, South Melbourne; Fitzroy Street, St Kilda; Glenferrie road, Hawthorn; Glenferrie Road, Malvern; Puckle Street, South Yarra and Toorak Road, South Yarra.

The occurance isn't new as Ksubi set up its pop-up store - picture from the website, record/preserve/share - back in late 2008.

Alistair Walsh

Alistair Walsh

Deutsche Welle online reporter

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