Darrell Lea among store closures as Adelaide’s Rundle Mall vacancy rate hits double figures: Savills
The vacancy rate on Rundle Mall, the premier pedestrian street mall in the Adelaide CBD, increased from 6.85% to 10.27% between June and September, with a Darrell Lea store among those stores that are currently standing empty.
A new report from Savills shows that there are 15 out of 146 stores now vacant on Rundle Mall compared with a vacancy street on Rundle Street of 2.88% - the non-pedestrianised portion of the retail strip extending east - with just three out 104 stores vacant.
This was up from 1.87% in June and also the result of a retailing failure with the Mary Martin Bookshop being placed in liquidation.
Darrell Lea occupied a store at the western end of Rundle mall and closed when all Darrell Lea stores ceased trading on September 9.
The 87-square-metre space at the entrance to the mall is advertised for lease by Michael Tayler of Leedwell Property – the rental sought is not disclosed – with photographs showing the distinctive Darrell Lea signage still in place.
The report, compiled by Savills research analyst Hamish Johnston, lists the Darrell Lea closure as the most high-profile vacancy and also notes that number of smaller stores have also become vacant since the last quarter.
Despite the large gap in vacancy rates, Rundle Mall continues to command very high net rents (ranging from $2,000 to $3,700 per square metre) compared with Rundle Street, where rents range from $400 to $1,200 per square metre – a factor that may explain the lower vacancy rate on Rundle Street.
Rundle Mall stretches from Pulteney Street to King William Street and is anchor-tenanted by a 23,300-square-metre David Jones and a 35,000-square-metre Myer store. Rundle Street runs from East Terrace to Pulteney Steet ,with the Savills Report noting that it has "quickly established itself as a major hub for food and fashion in Adelaide" anchored by a two-level Target store, and home to numerous specialty retailers including Sass & Bide, Marcs, Lisa Ho and Metalicus.
The report notes that since September the development of 77-91 Rundle Mall (known as Rundle Place) has been underway and will house the flagship Harris Scarfe store when completed in late 2013. The site will be co-anchored by Coles, along with a mix of other retailers and a 500-seat food court. The new building will also house 11 storeys of office space above the four storeys of retail.
According to Johnston, Rundle Mall has a number of challenges to overcome, “not least the current vacancy rate” of more than 10%.
“Longer term the Adelaide City Council’s master plan for Rundle Mall is expected to make the strip a more attractive precinct for shoppers, and help draw people back into the CBD. The City Council is also carrying out streetscape works along Rundle Street, which are designed to improve pedestrian enjoyment of the strip.
“Prime retail in Adelaide has endured a particularly difficult period in recent years. A lack of growth in retail spending and a shift towards online retail has made attracting business to traditional shopping precincts challenging.
“From a national perspective it is anticipated a recent drop in the official cash rate, on the back of rate cuts earlier in the year, will stimulate retail spending in the lead up to the festive season. Longer term the Adelaide City Council’s masterplan for Rundle Mall is expected to make the strip a more attractive precinct for shoppers, and help draw people back into the CBD. The City Council is also carrying out streetscape works along Rundle Street, which are designed to improve pedestrian enjoyment of the strip,” says Johnston.