Melbourne's CBD fringe apartment developments providing opportunities for retail tenants

The abundance of new Melbourne fringe CBD apartment developments are providing new retail tenancy opportunities - and proving popular as the retail tenants target residential foot traffic and surrounding offices.

CBRE is at the forefront of securing tenancies at the foot of developments, having secured the retail tenants of Lili Apartments on Claremont Street.

Two Birds One Stone was the first tenant to secure a 141-square-metre space at the foot of the development and is currently turning over $50,000 a week.

CBRE also secured Adriano Zumbo’s first retail space at Lily.

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Zelman Ainsworth of CBRE retail services says that pocket of South Yarra has turned into a food precinct in the last three years due to the growth of apartments in the area.

“Over the past 36 months there has been an increase in the level of interest from service and hospitality retailers looking to establish a presence at the foot of new residential projects.

“This is helping to create competitive tension within the marketplace,” says Ainworth.

Burger giant Huxtaburger has signed a deal at the base of the Trilogi development on High Street for a 90-square-metre store.

A UK steak house is soon to follow with a lease deal currently in the works.

In the new Upper West Side development of 2,500 apartments, 25 retail spaces will be available for lease.

The two retail spaces in the Sunday Apartment South Melbourne development have recently secured two tenants.

Tea Time Express has secured a seven-year lease for the 69-square-metre space and authentic Asian restaurant Kotaraya has secured a 10-yease lease of the 170-square-metre shop.

“We were pleasantly surprised with the level of enquiry from both hospitality and service retailers that were looking to secure a presence at the entrance to the 237-apartment building,” says Ainsworth.

Ainsworth says retailers have taken a jump as that pocket of South Melbourne is quiet, but the development and surrounding offices will deliver.

The Sunday Apartment development currently houses a three-bedroom apartment competing in the same price category as The Block Sky High apartments (and pictured below).

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"Traditionally retail is never emphased in apartments, where as now, with the right type of marketing and positioning, there are huge opportunities to activate successful retails at the foot of developments in Melbourne, either food, fashion or services," says Ainsworth.

Ed Wright of CBRE’s City Sales Division says inner city retail premises earning a strong return attracts a range of investors.

“The ability to own one of these CBD or inner city retail properties either directly or through a self-managed super fund, and earn a strong return has attracted a range of investors looking for alternatives to the share market, term deposits or residential property investment,” says Wright.