Melbourne retail is looking up – literally – with more and more being made of the spaces above the streets we know and love.
Colliers International executive of retail leasing Jarrod Herscu said the cramped market for commercial real estate in the city’s central business district is prompting shops and their landlords to make more of their spaces.
“We are seeing an influx of property buyers looking to secure long leasehold retail investments up to 30-100 years. In order to create upside, these investors are carving up the tenancy to increase the income,” he said. This was the case whether the space were a basement, street level, mezzanine or higher.
Currently, buildings like Curtin House or the Nicholas Building on Swanston street, or Mitchell House on the corner of Elizabeth and Lonsdale streets, are all filling or full with niche businesses – vertical laneways that both compete with and support each other in much the same way as businesses in the city’s storied street-level laneways.
In the Nicholas Building, for example, arts and crafts rule. Kate Boulton’s shop ButtonMania could not be more niche. For 21 years she has made covered buttons by hand.
But across from her is a tailor. Next door is a fabric shop and traditional haberdashery.
Her business needs the ecosystem that surrounds it – she said she is into her third generation of design students who need what she sells – so location is everything, even if most punters don’t know she’s there.
And the trend of moving up and off the street is set to become more widespread. In one example, Herscu said the leasehold owners of the George’s Building on Collins Street recently split the mezzanine level, causing the rent of the space to increase from $600 to $1000 a square metre. He said retailers moving into such a space can cut their rent in half compared to street frontage in a similar location.
The intent, he said, was to create a “footwear hub” in the building. He said both large, well known brands and smaller niche businesses can benefit from having a “destinational” location, where people know they will find what they are looking for, even if the shop is not obvious from the street.
Otto La Rosa at his store dot Comme, which is on level three of Curtin House. Photo: Mathew Lynn
It’s a model that is tried and tested in Asia, notably in Japan, where much of the most interesting retail happens in towers, and shoppers are happy to engage in what 25-year-old Otto La Rosa calls “the hunt”.
La Rosa is a collector. His passion is couture, which he has been liberating from warehouses and closets around the world since he was a teenager.
“I went on a trip to Paris with Mum and I saw these designers in the flesh, because I couldn’t see them here in Melbourne,” he said. “And a trip to Japan. It all just started there.”
Curtin House, Swanston Street. Photo: Mathew Lynn
Most of what La Rosa sells from his shop above the Toff in Swanston Street’s Curtin Building is old stock that would once have carried price tags two or three times what he asks.
But he finds it in odd places, where it sits mostly unloved, and brings it home for a chance at new life in Melbourne. Now, aside from the stock in the shop, he has two storage rooms full.
“That’s the collector in me,” he said. “I hold on to things until I find its matching piece.”
Initially, he sold stock on his website – mostly to other collectors overseas – and used an address in the Nicholas Building for storage.
But his collection is unique, consisting of pieces from Comme de Garcons, Issey Miyake, Yohji Yamamoto and Walter van Beirendonck, to name a few. And so people kept showing up in the flesh, wanting to see the pieces and, well, shop.
Jarrod Herscu said smaller retailers like dot Comme compete for location against global mega-stores like H&M, so targeting a customer who wants exactly what they are selling is pivotal.
“These retailers are established and have brand recognition,” he said. “Therefore, they do not require street exposure and are happy to relocate into more ‘destinational’ locations.”
La Rosa said these businesses give him hope that Melbourne is waking up to a larger idea of itself – “becoming a proper city”.
“You go up into these buildings and you just find these amazing people,” he said.
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