Melbourne Retail

[Dazedmw]

In one of the threads here there were a few posts regarding the risks for the future of Melbourne retail. I heard a story today which made me think of those risks.

Now, strong retail strips can still be found but I have seen more and more "odd" sales come through the system. Generally sales selling at yields that would be been unobtainable 24 to 36 months ago.

Anyway to the story, this city fringe property was purchased in 2009 for just over $5 million. Since purchase the tenant had defaulted and despite months of the property being on the market (perhaps with the wrong agent) only half had been relet and at a rental about 45% of the previous rental rate! The bank decides to examine its security and the valuation comes in down 48% from the previous purchase price. Ouch.

Hopefully this is a one off, but the market in this area of town is struggling and we may hear more stories like this in the coming months.

 

[Hulkster]

Mrs Hulkster and I have been dsicussing the demise of retail strips particularly in Melbourne. We walked down Bridge Road in Richmond recently and the amount of vacant or soon to be vacant stores is mind boggling.

The former DFO at Spencer St had something like 45 empty stores at last count.

Chapel Street is hot and cold for small retailers.

We feel its the Westfield effect.

 

[Scott No Mates]

DFO in Spencer St was always going to be a dud - how can you expect a discount centre to exist in the cbd so close to 1st retail without something giving. Either new season/full priced fashion would suffer or be sold from DFO or bargain hunters would abandon 1st retail for old stock without having to travel to Essendon etc.