Leica backs Melbourne CBD revival with world’s biggest store

The upper levels of 273 Little Collins Street include a gallery with rotating exhibitions, an academy room to host popular Leica workshops, a fully kitted photographic studio, and a rooftop terrace for outdoor events.

The ground floor is dedicated to showcasing Leica’s famous range of cameras – starting from $2700 and rising to more than $16,000 – as well as its lenses, watches, projectors and accessories. There’s also a café and lounge at the back where enthusiasts can take their time weighing up a purchase, get advice from a Leica expert or just browse a photography book.

“It’s not all doom and gloom [in the CBD],” Leica Australia managing director Ryan Williams said.

“There are still people in the city. Office occupancy may be down, but retail vacancy is returning to the historic average.

“We’re seeing this recovery in the footfall into our new flagship store.”

Although office vacancy in the Melbourne CBD is steadily rising – reaching almost 20 per cent, according to new figures – retail vacancy has been trending down and is now close to its 10-year average of 5.9 per cent.

“Post-pandemic, consumers are being drawn into the CBD for social reasons, entertainment concerts, recreational activities and cultural exhibitions,” a recent JLL report noted.

This reactivation of the city’s retail and hospitality scene is being driven to a large extent by the refurbishment of older buildings such as the former David Jones menswear store, which is being transformed into flagships for Mecca and Rodd & Gunn (as well as office space) and the redevelopment of the Walk Arcade into two new IHG hotels.

Both these projects run from Bourke Street Mall to Little Collins Street – across the road from the new Leica showroom. This was previously a bar before the German company spotted the “For Lease” sign and saw an opportunity to create a multi-storey retail, art and events hub centred on the world’s biggest hobby: photography.

Although the construction activity is deafening at present, Mr Williams said this pocket of the city would become “a really beautiful spot in 12 months’ time”.

“With the new Town Hall Station just over the road, we expect this part of the city to become a real thoroughfare,” he said.

‘Another clear sign of confidence’

Melbourne lord mayor Nick Reece said Leica’s decision to choose Melbourne’s CBD as the location for its biggest shopfront in the world was “another clear sign of confidence in the value and prestige of retail in the city”.

“We’re seeing a real trend of developers keen to retain and respect Melbourne’s glorious old buildings and put them to new use,” Councillor Reece said.

“In just a few weeks, beauty juggernaut Mecca will open its flagship store in the Bourke Street Mall … also, under way at the moment is the $25 million refurb of the Tivoli Arcade [on Bourke Street].

“So within a stone’s throw of each other in the CBD, you’ve got three major refurbishments that prove everything old can be new again.”

Leica’s move to Little Collins Street (it previously had a boutique and gallery in St Collins Lane) followed the camera maker striking an eight-year lease at a record rate of $1000 per sq m with landlord and restaurateur George Sykiotis in March last year.

As part of the deal, Mr Sykiotis (who paid $8.45 million in 2022 for 273 Little Collins Street) and Leica collaborated on a multimillion-dollar refurbishment based on designs by German interiors firm Holzrauch (which also designed Leica’s new Manhattan store in the New York’s Meatpacking District) and local architects Techne.

”The building is over a 100 years old and needed a lot of work,” Mr Williams said.

“The only thing that remained were the outside walls. We even raised the floors to get higher ceilings and cut out the void in the front.”

The soft opening of the new Melbourne flagship – an official opening is planned for September and will be attended by Leica CEO Matthias Harsch– follows the opening of a 160 sq m store in Melbourne’s Chadstone Shopping Centre in 2019.

This is all part of Leica’s brick-and-mortar expansion strategy focused on deeply engaging with its upmarket customer base of photographic enthusiasts and professional photographers.

The strategy has paid off handsomely: over the 2023 financial year, Leica, which is 45 per cent owned by Blackstone, reported record sales of €485 million ($800 million), up 9 per cent on the prior year.

“The bigger the space the more experience you can offer. These are so important when making a considered purchase. We want our customers to spend more time in our store, and for it to be quality time,” Mr Williams said.