Swatch adds gloss to Melbourne’s luxury watch precinct
A Collins Street city block in the Melbourne CBD has cemented its status as the country’s premier luxury watch precinct after famed Swiss watchmaker Swatch opened a flagship store at the front of the St Collins Lane mall.
Swatch – part of Swatch Group, the world’s biggest watchmaker – has leased a 315-square-metre store at 260 Collins Street, replacing American leather handbag fashion house Coach.
The arrival of Swatch comes as new figures from CBRE show the Melbourne CBD vacancy rate fell 330 basis points in the second half of 2023 to 7.4 per cent – the lowest level since 2021 – but still well above the long-term average of about 4 per cent.
Over the same period, super prime rents in the CBD fell 10.3 per cent year-on-year to average $6500 per square metre, driven in part by a slow return-to-work. Incentives remain high at 20 per cent in the CBD.
The new Swatch store – the largest in the country – will showcase the watchmaker’s vast collections in an offering that will feature large LED displays within a glass and metallic brick fitout inspired by Melbourne’s famous laneways.
Swatch – known for its colourful and playful watch designs – joins some of the world’s most famous luxury watch brands who have taken up residence on the Collins Street block running from Elizabeth Street to Swanston Street.
The historic Block Arcade on the corner of Collins and Elizabeth streets is the centre of this new precinct housing Bell & Ross, Bremont, Oris and Bovet 1822.
Alongside these brands, luxury Japanese watchmaker Grand Seiko is working on plans to open a flagship store at the Collins Street entrance to the 131-year-old arcade in May.
Next door is the premises of official Rolex retailer Watches of Switzerland, while opposite the new Swatch store is another luxury Swiss watchmaker, Tag Heuer. A few shops further up Collins Street is yet another luxury Swiss watchmaker, Longines, and right next door is official Rolex and Patek Philippe retailer The Hour Glass.
“If you want to buy a watch from $40 to $40,000, there is no point in going anywhere else [than this pocket of Collins Street],” said Grant Cohen, manager and owner of the Block Arcade.
“The opening of the new Swatch store has cemented this whole precinct as the horology centre of Australia,” Mr Cohen told The Australian Financial Review.
Just over 20,000sq m of new CBD retail space is due to be added this financial year. This includes the redevelopment of The Walk Arcade running off Bourke Street Mall (featuring shops and two new hotels) due to be finished in April and the redevelopment of the former David Jones Menswear store at 299 Bourke Street by Newmark Capital.
“These developments are expected to aid in the rejuvenation of the Melbourne CBD,” said CBRE’s head of retail research, Amita Mehra.
Mr Cohen said foot traffic through the Block Arcade was well above pre-COVID levels from Friday to Monday, when tourists and locals flock to the CBD.
“We’re still down [on pre-COVID] Tuesday, Wednesday and Thursday, due to office workers not using the arcade to get from A to B,” he said.
Highlighting landlord confidence in the Melbourne CBD retail scene, Mr Cohen said his family were about to reopen the Block Court – the retail building next to the Block Arcade – that had previously been leased to Bendigo Bank.
Mr Cohen said the former bank branch was being returned to its previous layout of multiple shops in an arcade. “We will have beautiful shops to lease in early April,” he said.
In much need of rejuvenation is Swatch’s new home – St Collins Lane mall – which has battled high vacancy rates since opening in 2016.
The arcade-style mall – acquired by local platform Vantage Property and global investor Credit Suisse Asset Management for about $122 million in 2020 – was put up for sale in October 2022 after plans to reposition it with the inclusion of offices and a new food court were disrupted by rolling Melbourne lockdowns.
