Fitzroys Market Report - Melbourne CBD

La Trobe Street’s prime section vacancy is at a relatively low 9.1%, and this precinct is expected to be the most direct beneficiary of the rush return of Chinese international students in the coming months.

Also recording single-digit vacancies was the core of Flinders Street –from Elizabeth to Russell Street, immediately opposite Flinders Street train station and Federation Square –at just 5.4%.

The famed “Paris End” of the CBD – the east end of Collins Street - recorded by far the lowest vacancies of any precinct in the CBD at just 2.47%.

“The east end is still very popular for high-end retail and in particular hospitality operators. Both of these sectors have been remarkably resilient over the past three years,” Lockwood said.

“We’ve seen Aesop and Swarovski commit to stores, joining Gucci, Cartier and Hermes in the famous precinct.

Also within the east end precinct, Flinders Lane (13.25%) continues to thrive as a culinary destination. Grill Americano has recently joined the likes of Gimlet, Chin Chin, Supernormal and Garden State Hotel.

“We expect the east end to be particularly busy for hospitality tenants in 2023.”

The Western End of Collins Street (17.8%) is evolving with new developments coming out of the ground such as Charter Hall and GIC’s 555 Collins Street, which has attracted pre-commitments from Amazon and Aware Super. Also in the west of the CBD is Mirvac’s $1 billion dual-tower build-to-rent and office project at 7 Spencer Street and V-Leader’s $400 million future office tower at 600 Lonsdale Street, while The GPT Group recently completed its Queen & Collins project. Specialty tenants such as Cosentino have eyed off chances to activate the western core of the CBD, with Fitzroys leasing a Collins Street space to the international brand for a new showroom concept, while restaurant Freyja opened up and Italian artisan market is set to open this year, all looking to capitalise on the influx of office workers.

According to Melbourne City Council, some $2.5 billion worth of new development applications will be lodged in the CBD and surrounds in 2022 as developers and investors show their faith in the future of the city. Around 200 new development applications were lodged in the CBD.

Tenants such as EB Games optimising their space have included gaming giant EB Games, which moved from Swanston Street to Elizabeth Street (22.1%) in a deal struck by Fitzroys.

“We feel that moving into 2023, the overall sentiment will be positive within the CBD,” Lockwood said.