Six unmissable retail investments hit the market in Melbourne’s CBD
Famous for its stylish boutiques, buzzing laneways, world-class dining and cultural flair – not to mention its famously unpredictable weather – Melbourne’s CBD continues to attract locals and visitors alike.
As the retail sector enjoys a long-awaited resurgence, savvy investors are turning their eyes to the city centre, Victoria’s top destination for both domestic and international overnight guests.
The CBD shopping precinct attracted 779,000 domestic and 411,000 international overnight visitors in the September quarter alone, according to March figures. Of all international visitors, a striking 71 per cent made their way to the lively CBD retail core, while 52 per cent visited the Queen Victoria Market – underscoring the precinct’s powerful pull as a shopping and cultural destination.
Now, a fresh crop of retail properties has hit the market, ranging from bubble-tea shops to heritage menswear stores, massage studios to long-established restaurants. Each offers stable tenancies, high foot traffic, and serious value-add potential, making them prime picks for private investors looking to capitalise on the city’s retail revival.
Bourke Street
This commanding and rare four-storey freehold retail investment is situated in a thriving retail and hospitality precinct at 418-420 Bourke Street, near Hardware Lane and the Bourke Street Mall.
Long-time ground-floor tenant, menswear label Peter Jackson, tucked between Elizabeth and Queen streets, remains on a lease with no options, while the remainder of the “trophy” heritage building boasts “incredible upside” potential, according to agents Teska & Carson.
The owners have a planning permit to transform the entire building – which has a total area of 417 square metres on a 168-square-metre parcel of land – by converting the upper levels into three two-bedroom whole-floor residential units.
Across the road, builders are putting the finishing touches on a $1 billion ”cutting-edge” commercial office tower designed by architecture firm Bates Smart, which will bring significant exposure and leasing opportunities.
Meyers Place
Surrounded by luxury retailers and “the very best Melbourne has to offer” near the Paris end of the CBD, close to Parliament Station, this “timeless” investment in the heart of the hospitality precinct is being offloaded for the first time in 32 years.
Whether you’re looking to own and occupy, or passively invest, the well-positioned and rare two-storey hospitality venue at 20 Meyers Place – home to long-time tenants Bar Carlo and The Waiters Restaurant – takes in foot traffic seven days a week, with a net rental income of more than $150,000 per year.
The property adjoins the newly opened modern French eatery Maison Batard and is close to Italian stalwart Grossi Florentino, rooftop bar Siglo, and tapas favourite Bar Lourinha.
Down the road from The Imperial and Le Meridien hotels, the property sits on 102 square metres of land and has a floor space of 175 square metres.
Cushman & Wakefield describes the asset as a “cornerstone of Melbourne’s dining culture for over 80 years”, with Meyers Place undergoing a “once-in-a-lifetime evolution”.
The area is set to become “a national drawcard, following recent major acquisitions by Merivale Group at 12-18 Meyers Place and the City of Melbourne-owned car park, 34-60 Little Collins Street” the agents say. Get in quickly to make your mark.
Elizabeth Street
A double-fronted two-storey retail opportunity has come to market in what agents at Cushman & Wakefield describe as “a perfect set and forget retail investment, one of the best offerings to the market in the past five years”.
The recently renovated asset, at 423-425 Elizabeth Street, is located in a “booming” northern pocket of the city, with 24-hour trading, and “Australia’s highest density residential location”.
Underpinned by a global tenant, flexible zoning, and rear laneway access, the shops also boast a street frontage of more than eight metres, and foot traffic aplenty.
The 5+5 lease is held by two eateries of the Chinese multinational fast-food restaurant chain, Mixue Group. Think affordable ice cream, coffee and bubble tea, and comfort food eatery Wonton Lab next door. The group pays rent of more than $428,000, with annual increases of 3.5 per cent.
The 184-square-metre landholding has floor space of 283 square metres and is set to benefit from its position near the Town Hall Metro train station opening later this year, as well as its close proximity to RMIT, the University of Melbourne, the Queen Victoria Market, Melbourne Central and the biomedical precinct.
Bourke Street Plaza
This rare CBD retail centre sits in one of the most heavily pedestrianised locations in Australia, just steps away from Bourke Street Mall and in the heart of Chinatown.
The land-rich property, 206 Bourke St. Plaza, is one of the largest holdings in Melbourne’s busy retail district. It has 11,845 square metres of gross lettable area across six levels of retail and commercial tenancies. It also rake in $6 million net annually.
Tenants include JB Hi-Fi, Victoria Police, and Hong Kong dim-sum restaurant chain Tim Ho Wan, known for being “the world’s cheapest Michelin-star restaurant”.
The massive 3157-square-metre landmark, about halfway between Swanston and Russell streets, boasts 58 metres of dual street frontage onto Bourke and Little Bourke streets.
Agent Cushman & Wakefield, together with JLL, describes “enormous upside” redevelopment potential (STCA), and its ability to generate $1 billion in annual retail sales.
A “true intergenerational freehold retail asset”, the listing reads.
McKillop Street
If you’re looking for something smaller and want to spend more time in Melbourne’s famous laneways, here’s your chance.
Agents at Sutherland Farrelly describe this opportunity as secure and ideal for an investor keen to run a self-managed super fund.
Just steps from Little Collins Street in a tightly held precinct with high foot traffic, 5 McKillop Street is flexibly zoned and fully leased.
Heritage-style lampposts dot the red-brick laneway that connects Little Collins and Bourke streets, between Queen and Elizabeth streets.
The 92-square-metre property, sporting a modern, dark-tiled frontage and a bright white and timber interior, benefits from its long-term lease to True Thai Massage. Established in 2009, the award-winning operator brings in around $60,000 net annual revenue.
“Our name reflects what we’re all about – real Thai massage, experienced therapists, with relevant options of remedial, therapeutic and relaxation massage on the menu,” the company’s website reads.
Bourke Street
In a coveted area known for its entertainment and theatres, two “exceptional” fully leased retail investments have come to market in a heritage building.
Edging towards Spring Street and surrounded by top eateries including Pellegrini’s and The European, this rare double opportunity in the “Bourke Hill” precinct includes shops 2 and 3 at 32-38 Bourke Street, leased to Thai fusion restaurant Bali Hai and barbershop Jacks Barbers.
Located opposite the Windsor Hotel and next to the new Le Meridien, it will allow investors to enter the city market “at a relatively low price point [in] one of the most sought-after areas of the CBD”, say agents Vince Carbone.
“The ‘Bourke Hill’ Precinct is being transformed into one of the most patronised hospitality areas of Melbourne with several large hospitality groups, including the Lucas Group, Merivale and the O’Brien Group, investing vast amounts of capital in the immediate area of the subject offerings,” the listing reads.
The shops, offered separately or together, boast secure, long-term tenants with options, generating more than $235,000 annually in rent. The investment is well-connected to transport, including train and tram services, so you can leave your car at home when popping in.
