Clothing retailers account for 30.3% of all tenants in the Melbourne CBD maintaining its place as the second largest retail industry in the area according to research from Knight Frank.
The report found that the fashion industry saw a decrease of 3.2% in terms of retail presence in the CBD while new entrants into the market were predominantly international retailers.
According to a statement from Knight Frank, retailers in Melbourne should be looking for the economy to strengthen over the medium term which will contribute to increased retail turnover.
“The Victorian economy is forecast to strengthen over the medium term, which should have a positive flow-on effect on the retail sector.
“Retail turnover growth is forecast to increase at an average of 3% between 2018-2021 and an expected increase in wages should further support the retail industry.”
While rent is commonly listed as a factor for retail movements and store vacancies, the report found that rental rates remained stable over the past 12 months with the exception of the Bourke Street Mall.
According to data, gross rents for the Bourke Street Mall ranged between $8,000/sqm to $10,000/sqm as of June 2018 while shopping centre rental rates came in at the lowest between $800/sqm and $2,000/sqm.
The report also found that the number of international retail brands present in the CBD increased to 157 up from 137 in 2016-17 and the number of international retailers is now 2.4 times the 65 recorded in 2010.
53.5% of those international retailers were listed as clothing and footwear brands with luxury retailers Versace, Fendi and Bottega Veneta entering into the market and other luxury brands such as YSL and Hublot looking for stores in the CBD's Paris-end.