Hospitality driving Melbourne retail vacancy drop – BeanScene

New data released by the City of Melbourne has revealed almost 85 per cent of shopfronts across the city are now occupied, as the retail bounceback from the COVID-19 enforced lockdowns continues.

After hitting a record high of 27.9 per cent in 2021, Melbourne’s central CBD retail vacancy rate has dropped to 5.5 per cent, making it the lowest of any capital city in Australia according to Lord Mayor Nick Reece.

Retail vacancy rates across the broader municipality have dropped to 7.8 per cent, however 14.7 per cent of shopfronts still remain vacant in Docklands despite its vacancy rate dropping ten per cent over the past two years.

“Melbourne has once again set the benchmark, recording another year of declining shopfront vacancy rates – reinforcing its reputation as a great place to do business,” says Reece.

“A CBD retail vacancy rate of just 7.8 per cent is remarkable for a city of our size and global standing. Behind that number is the drive and resilience of business owners, [and] their hardworking teams.

“We’re proud to welcome more global, national, and local businesses into Melbourne’s thriving retail scene, as we work together towards the city’s most successful Christmas trading period yet.”

Analysis by commercial leasing agency Fitzroys released in June has found hospitality, food and beverage, and entertainment operators to be driving reduced vacancy rates around Melbourne, with the desire to secure storefronts near the soon-to-be-opened Metro Tunnel stations seeing businesses move decisively.

Fitzroy’s latest ‘Walk to CBD’ report has found these retail categories are responsible for 47.4 per cent of the take-up of retail spaces over the past 12 months, which is a marked increase from the 34.1 per cent recorded at the beginning of 2023.

“We continue to see a resurgence in foot traffic and customer activity in the CBD on the back of a booming night-time economy, major events, the return to the office, and the upcoming completion of the Metro Tunnel,” says Fitzroys’ Franklin Gikas.

“More operators are looking to be part of this revival.”