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Sydney’s George Street is poised to become the CBD’s new retail hotspot, thanks to the new tram line and more competitive rents.
Construction work on the light rail line over the past two years has caused significant disruption to many businesses on George Street, with some saying their earnings had halved.
But the CBD portion of the 12-kilometre light rail, which will run along George Street from Central Station to Circular Quay and which is due to open in 2019, is drawing in other retailers hunting for a rejuvenated central location with increased foot traffic.
One of Sydney’s most popular cafes The Grounds, which opened a city store recently on George Street, saw the potential of the strip even through the ongoing construction and partial street blockages.
“We took over the site when the general area was in a down-turn, knowing that George Street would establish itself even further as a destination,” The Grounds co-founder and creative developer Ramzey Choker said.
“As we move to open for dinner trade very soon, the light rail will offer easier accessibility for our guests and of course give our venue greater exposure with more people around.
“I think it’s a really good thing for the brand to be so accessible to our guests and the light rail will offer that.”
A few shops away, bags and luggage retailer Crumpler, which opened its third store on George Street in August, is also tapping into the strip’s commuter foot traffic.
“With the light rail redevelopment nearing completion, George Street will strengthen its position as the epicentre of Sydney’s retail experience and we’re excited to be a part of it,” Adam Wilkinson, chief executive officer of Crumpler, said.
“George Street is an exciting place that we feel attracts our core customer: 25 to 49-year-old locals working or living in the city or surrounding suburbs and tourists interested in uniquely Australian brands.”
Colliers International’s retail leasing executive Pieter Englebrecht said retailers were starting to jump on the George Street bandwagon.
“Retailers are looking to George Street as the next option and the light rail development will assist in transforming this area into the ‘main vein’ of the Sydney CBD, allowing greater access to this part of the city on a daily basis,” he said.
Cameron Wakeham, manager of retail leasing at Colliers International, said George Street’s cheaper rents, compared with some of the other CBD retail hubs, was another factor attracting retailers.
“With the imminent arrival of e-commerce stores such as Amazon and Ali Baba, retailers need to remain competitive and cut costs in any way they can, and ensuring rental costs remain relatively low is an easy way to do this,” he said.
Retailers paying higher rents in Pitt Street Mall have begun to look at other options, with Forever 21 seeking to end their lease in Sydney Arcade and Lovisa and GStar exiting MidCity Shopping Centre.
Average rents in George Street range from $3750 a square metre to $6750 a square metre, Colliers International data shows. This compared with Pitt Street Mall, which has a square metre rate of $9750 to $21,250.
Rents for King Street, between George and Castlereagh streets, are between $5500 a square metre and $12,750 square metre.
A number of developments with a retail component are in the pipeline for George Street including Circular Quay Tower by Lendlease, 275 George Street by John Holland and Brookfield’s Wynyard Place, Mr Englebrecht said.