Flinders Lane boom pushes retailers upstairs
Competition between retailers and office users for space on Melbourne’s Flinders Lane has pushed rents to an all-time high.
Retailers and companies taking office space are now paying as much as $700 per square metre for a piece of one of the CBD’s most iconic laneways – double what it cost 10 years ago.
Savills director Phil Cullity says that while retailers previously only sought ground floor space, leasing demand is pushing then skyward, into upper-level spaces that have traditionally been the domain of office users.
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“With the laneway now in a third phase of transition where typical office space is now being taken up for vertical retail, vacancies are becoming increasingly scarce and that means we are going to see continued rental growth for years to come,” Cullity says.
Highlighting the scope and variety of the competition for a Flinders Lane foothold, bridal designer Bluebell Bridal recently secured 205sqm on level one at 141 Flinders Lane, Warren and Mahoney Architects leased 213sqm on level four and Akesa Pharma took 160sqm on the top floor.
There is no doubt the lane is seeing significant change and that’s also being reflected in rents
All of them paid up to $700 per square metre.
Cullity says Flinders Lane has slowly transformed from rag traders’ den to an office hotspot and now a retail destination.
“The change has been dramatic. Extensive refurbishments to old warehouse buildings featuring high ceilings and wonderful light, and the introduction of modern building services and facilities has pricked demand,” he says.
“There is still a place for the galleries et al, which give the precinct great character, but there is no doubt the lane is seeing significant change and that’s also being reflected in rents.”