The Melbourne shopping strip where one in four stores is empty

One in four shops on St Kilda’s Acland Street has been empty in the past year, even as suburban retail-strip vacancies declined across Melbourne for the second consecutive year, with clothing and footwear stores increasingly pushed out.

The vacancy rate on Melbourne’s prime strips has fallen from 12.8 per cent to 11.3 per cent over the past year, but only two strips recorded vacancy rates below their 20-year average, according to data from property consultancy Plan1.

Acland Street has the highest retail vacancy rate in Melbourne, with one in four stores empty.Credit: Eamon Gallagher

The first, High Street in Armadale, had its vacancy rate fall from 10.3 per cent to 3.6 per cent, while Church Street in Brighton had the lowest vacancy rate at 0.6 per cent.

Chapel Street attracted an influx of clothing tenants, many encouraged by lower leasing terms, which has helped the strip achieve its lowest vacancy in nearly a decade. However, the 11.3 per cent figure was still higher than the street’s 20-year average of 5.5 per cent.

Plan1 director Richard Jenkins said the pandemic had ushered in a re-evaluation of real estate strategies for many stores, as well as identity issues, wreaking havoc on some of Melbourne’s main shopping strips.

“Acland Street has replaced Bridge Road as the ugly duckling, recording the highest vacancy of any retail strip in the past two decades with a staggering blowout to 27.5 per cent,” Jenkins said.

Owners of shoe outlet Globe posted a sign on their old store in Acland Street pointing a finger at the government for the store’s decline in sales and its decision to move to Port Melbourne.

“Customers loved this location but reality is this location died on Monday 8 August 2016 when it became a dead-end street,” the sign read, referring to a redevelopment of the street that closed one end to traffic. “That was the day our store became unviable. The decision by the government and its officers to create the dead-end at that time ended the store’s business.”

A sign on the old storefront of shoe outlet Globe on Acland Street.

The sign also said sales at the store had dropped 60 per cent and failed to recover at the Acland Street location, while its company sales across Australia increased 250 per cent across Australia over the same period. “Blocking Acland Street killed the vibe, killed the location and killed this store,” it read.

Vacancies on Glenferrie Road in Malvern also reached an all-time high of 14.8 per cent.

Despite the vacancy rate falling from a peak of 31 per cent in November, the churn rate on Melbourne’s shopping strips remained high at 15 per cent – well above the long-term average of 7.4 per cent. The highest churn rate – 18 per cent – was recorded on Burke Rd in Camberwell, Chapel Street and Acland Street.

Jenkins said this was a response to changing work and commuting patterns following the pandemic, which pushed many retailers to review their networks and leave or relocate for better positions within individual precincts.

Cafes and restaurants remained the most prevalent occupiers across all shopping strips, accounting for nearly a third of all shops, followed by clothing and footwear, hair and beauty and homewares.

Jenkins said the services-based occupiers, which comprise about 21 per cent of shops, had overtaken clothing and footwear retailers which accounted for 33 per cent of shops 15 years ago.

Meanwhile, a newer addition – vaping stores – accounted for 4 per cent of new tenants, although the federal government’s proposed vape ban could reverse that trend.

With online retail sales growing by 25 per cent over the past two years, Jenkins said it was important for retailers, landlords and local governments to create engaging experiences to attract customers back to brick-and-mortar locations.

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