Retailers are happily moving into space above street level in Flinders Lane. Photo: Supplied

Retailers forced upstairs as Flinders Lane rents spike

Simon Johanson|Apr 17, 2019

A spike in demand for retail space in Flinders Lane has driven up rents and pushed retailers into upstairs premises where they are competing with IT and professional consulting firms for space.

Melbourne’s best known lane has seen a dramatic transformation over the past decade from rundown warehouses and secondary office blocks to funky stores and chic, exposed-beam workplaces.

Retailers, usually reluctant to take space above street level in buildings, were now moving into upper storeys, Savills Australia’s Phil Cullity said.

“We’ve had more interest from retail for these areas,” Mr Cullity said. “Previously they have just been used as office space.”

Wedding salon and dressmaker Bluebell Bridal recently opened on level 1 at 141 Flinders Lane in a 205-square-metre space opposite the Chanel Store, which itself set a precedent when it opened its multi-level store three years ago, he said.

Another fashion boutique Zambesi also opened on the ground and first floor of 75 Flinders Lane on the corner of Exhibition Street.

Mr Cullity said rents in the lane had now reached historic highs of $700 a square metre gross as vacancy rates tightened.

Ten years ago, they were half that rate.

Retailers with more established brands were willing to shift out of the street level, confident their clientele would follow them upstairs, he said.

The boutique office space in the upper levels of Flinders Lane’s buildings were proving increasingly attractive to medium-sized businesses, he said.

Warren and Mahoney Architects have moved into a 213-square-metre office on level 4 of 141 Flinders Lane, Akesa Pharma recently took 160 square metres on the top floor of the same building and Maxcon Constructions took a 500-square-metre space on the upper-ground floor at 71 Flinders Lane.