Bridge Rd retail vacancy at 25.5%: A Longitudinal study update on shop vacancy rates on Bridge Rd, Richmond (Melbourne)
Today I did exactly the same walk and counted 203 retail stores....
...and we currently have 52 vacancies, giving a 25.6% vacancy.
My definition of vacant was either closed and nothing in the shop, or a For Lease sign up on the existing shop, maybe as they are closing, or in some cases just having stock on display. I have always used a consistent approach in these measurements.
Are we seeing vacancy rates similar to this Australia wide? I have had a view for some time we have too much retail in Australia (everyone seems to want to be shopkeeper - like Hitler accused the Brits of being). Due to shops and shopping centres changing hands in many cases from one institution to another, the expectation of the rents seem out of control.
Every time I see a new development in Melbourne, we seem to always have shops opening on the ground level (and more), and I really wonder where this will end? Do you think Australia is "over retailed", and what will it take to tell Developers that their expectations on what rents they expect in new stores is normally way above reality?
I realise Bridge Rd is a factory outlet area for many retail brands, but it is still supported by a very dense residential population, so it is not like a factory outlet centre on the outskirts of a city.
I am interested in views on when retail vacancies will start to have an effect on rents. If you have any thought to share, feel free to leave your comment below, send me an email at firstname.lastname@example.org, or join our discussion on LinkedIn.
Peter Buckingham is the Managing Director of Spectrum Analysis Australia. He is a certified Management Consultant, and a Fellow of the FCA and IMC.