Vintage Cellars leases heritage-listed former bank building on Lygon Street

The rejuvenation of Melbourne’s most iconic dining strip, Lygon Street in the city’s inner north, has received a further boost with the refurbishment and re-opening of the heritage 1873 building at its heart.

The two-storey Renaissance Revival-style block at 259-261 Lygon Street in Carlton, most recently home to the Commonwealth Bank of Australia, has undergone a massive transformation with the previously blacked-out windows in the distinctive arches reglazed and the heritage facade renovated.

The National Trust-listed prime site’s ground floor is now occupied by liquor store Vintage Cellars, with the bank safe being restored as “The Vault” to showcase prestige wines and whiskys.

“They’ve done a really beautiful job, despite the challenges,” said agency Fitzroys associate director Chris James, who negotiated the six-year lease with options at $130,000 per annum. “It’s a period building and some of the difficulties were from a logistics point of view, to do with loading and unloading.

“I believe they had to get the approval from suppliers to get stock through the doors for the opening in July. But now it looks quite remarkable.”

Signs of revitalisation 

It’s the latest triumph for a strip centre that’s been ailing of late, with the closure of a number of its long-running businesses, and the stagnation of many more. While it had a vacancy rate of 5.6 per cent in 2018, that hit 13.5 per cent last year.

“I think that vacancy rate peaked six months ago, although we don’t have any 2020 figures yet,” said Mr James. “And now it is firmly in the process of rejuvenation, and we’re just a few years into that, with a few more left to go.

“But the revitalisation of this building has instantly activated this prime section of Lygon Street and we are now in discussions with three major national tenants who are looking to secure a premises within the precinct, although I can’t name them for privacy reasons yet.”

Lygon Street is well-known nationally as one of Melbourne’s dining, shopping and lifestyle jewels. With a long alliance with Melbourne’s Italian community which began arriving from the middle of the 19th century, it’s known as “Little Italy”.

It was the first area to introduce outdoor seating with a European feel, the home of the city’s first pizzeria, Toto’s Pizza House, which opened in 1961 and is still operating today. Lygon Street is also considered the birthplace of the “Aussie pizza” – with bacon and eggs served on top – and saw Australia’s first expresso machine installed.

The strip has long been a popular destination not only for locals, underpinned by a growing population with high-density development nearby and students from the expanding university, but also for visitors interstate and internationally.

“It’s so well located on the northern fringe of the Melbourne CBD and has the benefit of being pretty much in the university and medical precinct,” said Fred Nucara of Aston Commercial, who put the Commonwealth branch in a new premises further down the street. “It’s been a tourist icon for many, many years.

“But there has been a bit of a reshuffle over the years as a result of rising rents and higher operating costs, especially wages. There was an impact on the typical restaurants on the street which has caused some of them to close or move on after so many years, and caused some degree of vacancies.”

Those have, in turn, put downward pressure on rents, which have fallen between 15 and 20 per cent, according to Mr Nucara, even pre-COVID-19 pandemic. But now, with a number of new entrants to the strip, it’s slowly recovering its shine.

Popular cafe and cake shop Brunetti returned to Lygon Street – its 1974 birthplace – in 2012, after a bitter dispute with the owner of its 27-year premises in cross-street Faraday Street.

Then the 136-year-old Italian food and wine specialists King and Godfree owned by the Valmorbida family, which shut down in 2015, re-opened two years ago with a multimillion-dollar revamp of its expanded Lygon Street premises.

But more recently, there’s been a flurry of newer entrants to the street, including the Israeli-influenced vegetarian pub Green Man’s Arms, the wine bar Lord Lygon and ramen chefs Hakate Gensuke. On cross-street Grattan Street, Leonardo’s Pizza Palace replaced the old pizza-by-the-metre king Da Salvatore, and Tooborac Pies & Beer arrived on Elgin Street.

Late last year, Mr James leased the property next door to the new Vintage Cellars, the 70-year-old Carlton institution Lygon Food Store, to modern Asian eatery Lagoon Dining, headed by former Ezard and Longsong chefs Ned Trumble, Keat Lee, Chris Lerch and Susan Wyles.

“Together, these leases have maintained a focal point of activity in the prime of Lygon Street,” said Mr James. “A new generation of bar, restaurant and food and beverage operators has brought a fresh twist to Lygon Street and Carlton, and enhanced its unique character.”