Spanish-themed Chocolateria San Churro to open first Adelaide CBD store on Rundle Street.

Chocolate café chain Chocolateria San Churro will open its first store in the Adelaide CBD after leasing space on Rundle Street.

The Spanish themed chocolate chain has leased a 203 square metre café space at shop 5, 300 Rundle Street over seven years in a deal negotiated by CBRE’s Julia Pottenger.

While the price per square metre being paid by Chocolateria San Churro has not been disclosed, Property Observer understands that it will be around the going rate for rental space on the prime retail strip.

Annual rents on Rundle Street range from $400 to $1,200 per square metre.

Savills reported a vacancy rate of just 2.88% on Rundle Street in November last year.

Rundle Street is the non-pedestrianised portion of the retail strip extending east from Rundle Mall.

They are far dearer in Rundle Mall, the super-premium retail location in Adelaide, with CBRE reporting rents remained stable in the final quarter of 2012 and ranged from $2,400 per square metres to $4,000 per square metre.

Originating in Melbourne in 2006, the chain is known for its range of decadent chocolate products including its famous Spanish churros.

Pottenger says demand for Rundle Street remains strong with Yvonne’s Yiros Café recently opening next door to the new San Churro café. The street has also seen the return of Mimco who have taken the former Mary Martin Book Shop tenancy.

“San Churro will be a great addition to Rundle Street and will thrive especially as they are due to open before the ‘Mad March’ season,” she says.

In contrast, CBRE reports that demand for space on Rundle Mall has been reasonably subdued in the December quarter.

“Property along Rundle Mall is traditionally tightly held by private investors and therefore rarely come to the market.

“There have therefore been no sales recorded in Rundle Mall during 2012 and no properties listed for sale in the precinct.

“Yields have remained stable in the December quarter and ranged from 6.75% to 7.25% for super prime and 7.25% to 7.75% for prime space,” says CBRE.

A new mall – Rundle Place - is currently under construction due to be completed in March 2013. It has been reported that the centre is 95% leased with three international retailers to open stores in the development to be anchored by Harris Scarfe.

CBRE warns of an increase in the retail vacancy rate the Adelaide CBD during the first half of 2013.

“There are two reasons for this. Firstly that there are currently several sites which are being marketed for lease, but are still occupied by the current tenant and they are likely to vacate in the first half of 2013.

“Secondly there are several tenants which currently occupy space on Rundle Mall which will move to the new accommodation in the Rundle Place development when it is completed in March 2013.

“This is likely to result in very limited growth in rentals in the CBD and depending on how much vacancy eventuates and there will be a increase in the incentives landlords will need to offer to attract a tenant,” says CBRE

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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