One Direction had that one thing with Chapel Street pop-up shop
Boy band and teenage heartthrobs One Direction have taken Chapel Street by storm with their 1D pop-up shop as part of an increasing trend in Melbourne’s retail sector.
The band’s merchandise store was at 576 Chapel Street nearly four weeks since extending its lease by another week. It was due to close on Sunday.
The shop was swarmed by a legion of teenage girls when it opened in a made-for-media event. Fans emptied the shelves of stock, which was then replenished. The shop was rarely empty, with teenagers congregating at the site to discuss the band.
Pop-up shops have come into increasing prominence recently as they pick up slack in a market hit by high vacancy rates.
Adrian Boutsakis, the Teska Carson agent who leased the property, says pop-up shops can be risky for owners but they do offer a way to fill gaps between long-term tenants.
“Some people try to lease pop-up shops for four to five days. For an owner it’s often not worth the risk for the money. If someone’s offering you $1,500 to $5,000 for a few days and they damage your property the cost will be $5,000 to $10,000”.
One Direction paid about $15,000 to $20,000 for the property, which Boutsakis is currently marketing at $330,000 a year.
Boutsakis is in the process of leasing the shop on a long-term basis.
“The tenants needed to push out the date to design the fit-out, etc. Normally in that time the owner would look at that as dead time which he factors into his costings. A short-term tenants alleviates that issue.”
In March CBRE released data showing pop-up shops had plugged rental gaps in Melbourne, which achieved historically low retail vacancy rates in 2011.
Four out of the 10 shop leased on Bridge Road, Richmond, in the second half of 2011 were taken up by pop-up shops, and Chapel Street was identified as a pop-up shop hotspot.
Boutsakis says the size of the One Direction shop makes it an oddity.
“Most pop-up shops don’t want 200-odd square metres. Generally pop-up shops want to pay about $1,500 a week for smaller shops.”
Boutsakis says short-term leases may not earn the agent fees and are sometimes done as a gesture of goodwill to the owner.
“One of the reasons we do short-term leasings is to keep clients happy. If it sits there vacant for a while owners can sometimes lose faith in their agent. Obviously we don’t want to lose clients to other agents.
“Often fees don’t play a part and it’s just to keep the owners happy. We leave it up to them, we don’t push them to do it.”