Versace to open first Melbourne store
Luxury retailer Versace is defying the retail gloom and opening its first Melbourne store, striking a deal with global real estate giant Pembroke to set up shop in the T&G Building on Collins St.
The store is Versace’s third in Australia as the brand already has boutiques in Westfield Sydney and the Palazzo Versace hotel on the Gold Coast.
The upmarket retailer will be a neat fit for the Paris end of Collins St where Pembroke, the property arm of US funds giant Fidelity, has already signed top labels Gucci and Bottega Veneta for the same building.
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The deal comes amid fears for the health of the retail sector as US online commerce juggernaut Amazon launched in Australia this week, putting pressure on retailers such as JB Hi-Fi, Harvey Norman, Officeworks, Kmart, Target and Big W as well as department stores Myer and David Jones.
But high-end retailers could be sheltered from the Amazon effect as shoppers visit luxury stores because of the experience they can enjoy there, according to Matthew Knight, Pembroke Real Estate vice-president and head of Australia.
“People will be seeking that experience from those stores that they can’t get elsewhere,” Knight tells The Australian.
“So I don’t think it’s going to affect the luxury brands to the same extent that it might affect the mid-tier or lower-tier retail where they’re looking at price point only.”
Versace will take 307sqm of space on a 10-year lease at a rate understood to be about $4000 a square metre with rent increases factored in.
The deal was brokered by Zelman Ainsworth, CBRE head of Victorian retail leasing, who has brought other top-tier retailers to Collins St, including Fendi, Cartier, Gucci, Berluti, Burberry, Mercedes Benz, Van Cleef & Arpels and The Hour Glass.
“Luxury retailers are very much attracted to Collins Street as it gives their brand an opportunity to create an identity on one of Australia’s most premium shopping precincts,” Ainsworth says.
Rents for top retail space on the boulevard can range from $3500 to $5000 per square metre, which has been encouraging some landlords to consider making basement or upstairs space available to retailers.
Overall retail sales posted their strongest result since May yesterday, rising 0.5 per cent in October from the previous month.
Pembroke is undertaking a major refurbishment of the landmark T&G building at 161 Collins Street, which Knight says is progressing well and is on track to be complete by February.
The group has attracted key office tenants, including professional services firm Accenture and wealth manager IOOF.
Knight declined to comment on reports that Google and Nike are considering tenancies.
The building has about 14,000sqm of office space on four floors.
This article originally appeared on www.theaustralian.com.au/property.
