Suburban strips thrive despite retailing woes

The small agency is among 80 shops in the bustling northern suburbs strip that show little sign of depressed sales or the gloom confronting retailers.

Melbourne’s popular suburban shopping streets appear to be thriving despite retailers decrying tough conditions. Retail sales flatlined in July after a run of stronger than expected monthly results, the latest government data shows.

Yet Broadway has no empty shops or “for lease” signs even with annual rents of about $35,000.

“I used to run petrol stations. There was a lot of drive-offs, a lot people not able to pay for their fuel,” Mr Alan said.

Now he sells Tattslotto tickets, gift cards and other knick-knacks in “one of those industries that have never gone belly up”.

Closer to the city centre, Knight Frank research shows the vacancy picture is much more patchy.

Prime strips such as Bridge Road and Chapel Street are in trouble with empty shops near all-time highs.

At the same time, emerging retail strips such as Smith Street in Collingwood, Brunswick Street in Fitzroy, High Street in Northcote and Swan Street, Richmond, were booming amid population growth and a surge in new developments, Knight Frank’s Paul Pellegrino said.

Emerging strips had an average vacancy of 4.3 per cent, compared with 8 per cent across prime retail strips.

Smith Street had the least vacancy, 1.5 per cent, with only four shops available, researcher Jane Wong said.

Brunswick Street’s vacancy was highest at 6.3 per cent, Northcote’s High Street had 4.1 per cent and at 5.7 per cent Swan Street had far less than nearby Bridge Road where the vacancy rate was 21.4 per cent.

At Tunstall Square, in middle-ring suburb Doncaster East, only one shop is empty and even it is undergoing a refurbishment to become a speciality shoe store called The Comfort Zone.

Annual rents for the Square are between $60,000 and $70,000.

Comfort Zone owner Neil Blyberg is midway through moving from another popular street, Balwyn’s Whitehorse Road, where changing demographics are making trading conditions tougher.

An influx of Asian immigrants who prefer shopping in larger centres has whittled down the street’s customer base.

Once one of Melbourne’s premium suburban strips, Whitehorse Road “has been steadily in decline for the past five or six years”, he said.

While Tunstall Square with its 38 shops has no vacancy, Whitehorse Road north of the popular Balwyn Cinema has 125 stores, eight of them empty.

It’s a tolerable vacancy rate, perhaps indicative of rising rents which, Mr Blyberg said, have risen above the inflation rate at 5 per cent annually.

“Balwyn will turn out to be another Bridge Road if they keep raising rents,” he said.

Rents in Smith Street range between $400 and $550 per square metre, Mr Pellegrino said.

Along High Street they range between $400 and $600 per sq m, while Brunswick Street attracts rents between $550 and $700 per sq m.

Swan Street has the highest rental rates of the emerging strips between $700 and $1000 per sq m.