Some signs of life "pop-up" on Bridge Road as Witchery premises sold and leasing deals done

There have been some positive developments for the struggling Bridge Road discount fashion retail strip in Richmond with recent sales and leasing deals taking place.

In addition a trend of pop-up shops on short term leases to fill up vacant space on Bridge Road is also emerging.

However, some properties have changed hands at 30% plus discounts to previous sales prices while rental discounts of up to 30% remain on offer.

Last year Property Observer reported that Bridge Road's vacancy rate has risen from 2.9%  to 11.5% over the past two years having had the lowest vacancy rate of 11 suburban shopping strips five years ago.

Recently, Fitzroys senior associate James Gregson sold a substantial freehold at 113-115 Bridge Road to a local investor. The price was not revealed but it was advertised with $3.2 million hopes in April.

The fully refurbished property is leased to fashion retailer Witchery on the ground floor, and also includes two first floor apartments.

It is located on a site area of 268 square metres with two street frontages including a 10.53 metre frontage to Bridge Road.

Gregson said the purchaser realised the potential and significant upside in Bridge Road.

“There aren’t really any other key Melbourne retail strip locations in which you can get a 6%-plus return, leased to a national tenant with long-term development upside,” he said.

Another site, 656-658 Bridge Road, sold at auction for $1.905 million also through Fitzroys, a yield of around 5.2%. The site sold with its ground floor vacant and the first floor subject to a short term lease.

It previously sold for $2.75 million in November 2009 - a discount of 32% on the last sales price.

Gregson notes that leasing activity on Bridge Road had picked up, with a number of recent lettings including that of international cosmetics company L’Oreal.

Fashion retailer Romulus & Remus signed up at 648 Bridge Road, and the old IGA site at 29 Bridge Road was also leased.

Agent James Lockwood said that although food tenant enquiry had pushed up total interest volumes, some rents had softened, with discounts of up to 20%-30% being offered.

Gregson along with Fitzroy's director Mitchell Humphreys, has also listed the iconic Groove Train restaurant at 314-316 Bridge Road.

The property is leased to Groove Train on a long-term lease and is expected to sell for in excess of $2 million.

Bec McHenry, founder of industry collective for pop-ups, PopUnion, says the Bridge Road strip has changed significantly over the last few years.

"It is no longer the fashion 'destination' it once was, and this has meant the rents are no longer at the level they once were.

"Therefore, traders and owners alike have had to come to terms with some harsh commercial realities in the face of these changes. 

"Not everyone has embraced the concept of pop-up though, and rightly so.

"In it's current form, short term leasing is difficult for agents to manage profitably.

"There is a a lot of work involved, and the gains minimal in comparison to long term leasing commissions. The reality is, pop-ups don't just pop up out of nowhere, and there are significant barriers to entry for property owners and managers when it comes to embracing short term tenants.

"In light of this, we are working hard through PopUnion, to streamline the processes associated with pop-ups so more agents/owners can activate them in their properties, making short term profits whilst remaining open to long term leasing opportunities."

A permanent pop-up shop is now in operation on Bridge Road with rotating tenants.

"The owner has embraced the pop-up concept, and now offers his shop out to short term tenants on a monthly rotation - not because he can't get a long term lease, but because he recognises the value of and demand for pop-up. A great example of how pop-up will endure beyond times of economic uncertainty," says McHenry.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer


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