International retailers who have been aggressively entering the Australian market have been focusing attention on CBD’s and major shopping centres, not considering local shopping strips in Sydney.
This being due to the differing attitudes of the Sydney shopper compared to high street shoppers internationally, together with the difficulty in sourcing large tenancies in these locations. Many national tenants have been enquiring on local strips however seeking tenancies in the 200/sqm size range which is difficult for these local areas were the average strip shop size of sub 100/sqm. Rents in this location appear affordable compared to prime CBD rents achieving averages up to $1,500/sqm compared to Pitt Street Mall rents which average in the region of $8,000/sqm.
Prime Retail strip vacancies have continued at their high rate according to Ray White Commercial’s latest Prime Retail strip vacancy count. The trials of Oxford Street, Paddington have been well documented after growing vacancies from around 6% prior to Bondi Junction Westfield’s reopening, unfortunately the high rate achieved in the early 2010’s has maintained currently recording 11.81%.
The retail mix in this location has moved however back to a strong clothing and soft goods sector (33.01%) after a prolonged period of uncertainty for the strip. Encouragingly, multinational tenants remain in the strip seeing the benefits of the location’s foot traffic driven by both the local market and destination shoppers.
The Inner West’s version of a prime retail strip, Darling Street, Balmain also has gone through a change over the past five years, vacancy for the strip now a high 10.20% after sub 5% results back in 2008. Food dominates this strip with clothing tenants not as confident in this location which is a significant change in retail mix over the past few years. Darling Street remains one of the major retail strips which feature a full line supermarket, with Woolworths generating additional pedestrian thoroughfare to the east of the strip and has not hampered the opening of specialised food retailers into this location now accounting for 7.20% of the retail mix, while café’s and restaurants account for 17.96%.
While on the North side Military Road, Mosman looks to be the stand out performer of Sydney’s prime strips. Vacancy has been recorded at just 6.26% with long term tenancies remaining faithful to this location. The mix remains heavily reliant on clothing and soft goods representing 33.87% while services also is a strong occupier of this market, driven by banks and beauty services representing 17.35%. Food retailing totals just short of 20% of the market, with café’s and restaurants accounting for 8.05% and specialised food retailers (ie. specialised patisseries, cheese, fruit shops) represent 7.70%.