The gloves have been taken off as the battle to be named the most desired retail strip heats up between Sydney’s George Street and Pitt Street Mall.
George Street, with the launch of the light rail and the new pedestrian zones, is taking the fight to its rival, with tenants jostling for space as a crowd of new entrants get set to move in over the coming year.
The repeal of the late night lock-out drinking laws will also boost the strip, with hotelier Justin Hemmes, who owns the Establishment and Ivy bars, set to lead the charge with new live music and street-side dining ventures.
“The repeal of the laws is a positive step towards reinvigorating George Street and the challenge for us is to work on making it a destination,” Mr Hemmes said.
“We are planning to offer late night dining and music to make George Street come alive.”
And as the demand to have a presence on the street grows, from the new-look Wynyard train station and office redevelopment up to Central station, rents will also push higher, according to retail leasing agents.
We are planning to offer late night dining and music to make George Street come alive.Merivale CEO Justin Hemmes
George Street was formerly the main thoroughfare for Sydney since the opening of the Harbour Bridge in the north and Central station in the south. It also housed the main department store, Grace Bros, which is now the Mirvac-owned Broadway shopping centre.
But as the core of the CBD at Martin Place developed with the GPO and then the MLC Centre, the surrounding streets came to life and overshadowed George Street.
Pitt Street Mall remains the seventh most expensive retail strip in the world on a per capita basis, but the fierce competition among tenants to find a place on George Street will likely set the blow torch to the surrounding streets.
The average rent along Pitt Street Mall is about $12,000 per square metre per annum, George Street is gaining at about $9000 per sq m, while space on Mebourne’s Bourke Street Mall is leased out for about $7000 per sq m.
Connecting the two is King Street, which is taking over as the luxury street with Louis Vuitton re-opening on the corner of George and King Streets after an $11 million fit-out, Tiffany & Co at 175 King and now Valentino taking up a prime site at the Dexus-owed MLC Centre on the corner of Castlereagh Street.
Matt Hudson, national director and head of retail leasing at Cushman and Wakefield, said George Street is quickly becoming the cosmopolitan centre after the opening of the light rail.
“Justin Hemmes’ Merivale group is converting the previous Peter Alexander apparel store on George Street in his Ivy complex to an uber cool Italian trattoria, Totti’s,” Mr Hudson said.
“There is also the TFE hotel being developed on the corner of Hunter and George Streets, a new boutique hotel with rooftop poolside dining.”
Mr Hudson said a cocktail bar called Maybe Sammy has also opened on the edges of George Street, looking to capitalise on the light rail opening.
In the latest Cushman and Wakefield Main Streets Across the World survey, George Street has overtaken Melbourne’s Bourke Street Mall in the rents ranking.
“Higher footfall areas around Pitt Street Mall are becoming more hotly contested with strong demand from high-end luxury and footwear retailers for flagship sites along George and King Streets,” the report says.
“As a result, we’ve seen rents almost double along George Street as it opens up for business following the completion of the light rail. This has also presented an opportunity for landlords to reposition their sites.”
George street is quickly becoming the cosmopolitan centre with the opening of the light rail.Cushman & Wakefield retail leasing director Matt Hudson
Mr Hudson said he is anticipating continued positive impact on rents due to the increased foot traffic and better connectivity between the core CBD and surrounding suburbs.
In the past few years George Street has been known as the tech street, with Apple on one corner of King Street and Telstra on the opposite. Optus and Vodafone are nearby and Samsung is at the Market Street end. It has been suggested other tech outlets are looking at other nearby sites.
Cameron Wakeham, director of retail leasing at Colliers International, said there is a massive push for tenants to move to George Street with the highly anticipated opening of the light rail and proof of this is the rent which Georg Jensen paid for a 108 sq m store, setting a new benchmark at $7500 per sq m per annum.
“Pitt Street Mall is the 7th most expensive strip in the world so naturally retailers are finding more bang for buck on George St. International brands tend to lean towards Pitt Street Mall, while national brands are moving to George Street,” Mr Wakefield said.
Throwing further weight to the return of George Street’s popularity is a study of mobile phone density tracking.
Mark Copus, head of retail analytics at CBRE, says George Street is reactivating as people warm to the new pedestrian boulevard running through the heart of the city, with CBRE’s Retail Analytics beginning to show the trends reshaping the city.
Mr Copus says the data shows that with George Street back open in front of Town Hall, pedestrians are beginning to pour out of Town Hall square onto George Street revitalising the retail strip between Park and Bathurst Streets.
Between Market and King Streets, the now pedestrian-friendly George Street has been closing the gap on Pitt Street Mall over the last 12 months.
The CBRE’s visit index for this section of Pitt Street is down nearly 10 per cent in the three months to September 2019 compared to the same period last year, whereas the parallel section of George Street has been much more stable, with a 1 per cent growth over the same period.
“This robustness comes from George Street being favoured by people moving north-south across the city, making the destination an increasingly attractive retail location, Mr Copus said.
“The section of George Street between King Street and Margaret Street has seen significant change in the short period it has been fully open to pedestrians. Pedestrian traffic that once favoured Pitt Street during the construction period has now returned and is now busier than Pitt Street once again.”
Wynyard station is under going a $1 billion-plus redevelopment, with the National Australia Bank set to serve as the anchor tenant for the office tower above the train station. As part of the project, new retail sites will open on George Street and a range of tenants are said to be keen on signing up.
Mr Copus said the George Street entrance to Wynyard Station has shown more activity in the last three months and visits will continue to grow.
The section of George Street between Margaret and Bridge Streets has seen its CBRE visit index grow by 5.4 per cent in the three months to September 2019 compared to the same period last year, while from Bridge Street to Circular Quay the CBRE visit index has grown by 7.3 per cent over the same period, as George Street comes back to life post-construction.
Source: Thanks smh.com