Rundle Mall vacancy rate rises but tenant interest boosts confidence

Shop vacancies along Rundle Mall have jumped on the back of a string of store closures, but new high-profile tenants are boosting confidence in the precinct.

Rundle Mall vacancies increased in the second half of last year. Picture: Adelaide City Council

The shop vacancy rate along Rundle Mall has jumped on the back of a string of store closures, but it remains the best performing CBD retail strip in the country, according to the latest figures compiled by CBRE.

CBRE’s latest shopfront count reveals vacancies along the mall increased from a 15-year low of 4.5 per cent in the first half of last year to 7.5 per cent in the second half – still the lowest figure of all CBD strips surveyed across the country’s five largest capital cities.

Factorie, Typo and Sussan all vacated their premises during the six months to December, but CBRE retail leasing associate director Julia Pottenger said the Sussan site had since been leased to lululemon and the other spaces were currently under offer to major national retailers.

“The mall has received attention from high-profile tenants, particularly around the western end which has historically seen higher levels of vacancy,” she said.

“This demand comes off the back of major international brands like Uniqlo opening flagship Adelaide stores and highlights the flight-to-quality and experiential retail trends we’re seeing across the country.

“Off-market deals for space in Rundle Mall have also surged, indicating a competitive leasing market for occupiers.”

According to CBRE’s figures the retail vacancy rate in the wider Rundle Mall precinct – which includes the Myer Centre and other shopping centres and arcades – decreased from 17 per cent to 13.3 per cent in the second half of last year.

Outside of Melbourne, it was the largest drop in CBD retail vacancy of the five cities surveyed.

Vacancies in shopping centres along Rundle Mall, including the Myer Centre, dropped from 28.8 per cent to 21.5 per cent, as Uniqlo and Lush opened new flagship outlets.

Ms Pottenger said the return of city workers to the CBD, surging inbound tourism and returning international students were contributing to a brighter retail outlook for the city.

She said Adelaide had also been buoyed by the return of major events, as well as the return of major cruise ships in November and December, which had fuelled strong retail expenditure, particularly in luxury goods, clothing, and food.

The latest retail trade figures from the ABS revealed monthly turnover in South Australia increased by 1.7 per cent in January, on a seasonally adjusted basis, while full-year spending last year was up 9.4 per cent compared with 2021, reaching $26bn.

Nationally, the CBD retail vacancy rate tightened from 15.9 per cent to 13.9 per cent, with Melbourne reporting the biggest improvement, down from 14.9 per cent to 9.2 per cent.