Burger Wars: the battle of the beef patties

Forget Game of Thrones – there is a bigger battle being played out, and it involves beef patties between two buns.

It has been dubbed the burger wars and the "steaks" are high, but it's not just the product that is the subject of the fight; it's also the location and the rent being paid.

A Huxtaburger with crinkle-cut chips.Credit: Michael Clayton-Jones

It's the MasterChef effect, where tastes are more sophisticated.

Demand is also coming from customers who want variety with pulled pork buns, fancy sauces and not a slice of beetroot in sight.

Huxtaburger in Melbourne.Credit: Michael Clayton-Jones

Across all capital cities, property agents are being engaged to seek out key sites to capture office workers, new residents, hipsters and the more wealthy students.

The new kids on the grill are also giving the old-school McDonald's and Hungry Jacks a run for their money as they compete on location, price points and new products.

McDonald's closed the doors in George Street, Sydney, after deciding not to renew the lease. The fast-food giant said it would focus on upgrading the outlet at Circular Quay.

However, agents said the change of the nearby Tank Nightclub into Mr Wong had also had an impact. One said that had seen the demand for a late-night burger after a visit to the bar all but disappear.

Australia's hamburger wars are heating up.

McDonald's and Hungry Jacks have outlets at Wynyard station, which now caters for the after-pub crowd.

The two multinational chains also see the market changing and are offering an array of new burgers to compete with changing palates.

Among the new entrants to the market are Grill'd​, Mary's, Chur Burger Express, Burger Project, Burger Edge, Burger Shed, Ribs & Burgers, Burger Bro? and Melbourne's Brother Burgers. That doesn't include the numerous pubs that offer their own versions as a drawcard.

Giving the sector even more power is that these are run by an array of top chefs, including Neil Perry, Luke Powell (ex-Tetsuya's) and Warren Turnbull, among many others.

Property agents say the backing of these top-shelf foodies has meant they know all about the real estate business and have exact locations in mind.

As a result, the outlets are found in the city centre to capture the higher-paid office employee who is looking for something more upmarket than the usual fast-food offerings.

Alex Alamsyah, director of retail leasing at Knight Frank, said the new burger places were competitive in space requirements, but the established chains of McDonald's and Hungry Jacks were able to pay the bigger rents for prime locations.

It is estimated McDonald's is paying $1.25 million a year for a 250-square-metre spot in central Sydney (at Gateway on the corner of Alfred and Loftus streets and Circular Quay), and Hungry Jack's is paying $1.65 million a year for the whole building at 640 George Street.

"Given the high rents the traditional chains are paying, it is unlikely we will see gourmet burgers on prime streets in Sydney CBD," Mr Alamsyah said.

"Global burger chains like Carl's Jr, and Johnny Rockets from America and MOS burger from Japan are also looking at prime streets in Sydney's CBD, but appear reluctant to make a move, as rental in prime George Street could hit $5000 per sqm per annum."

Leif Olson, CBRE's head of retail brokerage leasing Australia, said the new food and beverage people were more sophisticated in their offerings to cater for customers' increasingly sophisticated palates.

"It's the MasterChef effect, where people now expect a better burger," Mr Olson said.

"As a consequence, the tenants are looking for sites with high pedestrian area with day and night trade."

One is Neil Perry's Burger Project at World Square in George Street, Sydney and Chur Burger Express in Wintergarden, 1 O'Connell Street. These are seen as prime retail settings, that would once have been the domain of high-end restaurants.

There is a major trend forming in Melbourne's hospitality industry around burgers. More and more restaurateurs are moving away from high-end white-tablecloth themed restaurants and moving towards casual dining. Many hospitality businesses are going back to basics and are putting burgers back on their menus.

The idea is that a restaurateur can turn over far more tables in one night with a more a more casual and "affordable" menu than a high-end venue. As customers become more price conscious, and now do extensive online research, the good operators have quickly adapted.

This has proven to be far more profitable for hospitality operators, while also making it easier for restaurants to reinvent their menus on a monthly and sometimes even a weekly basis, which allows them to remain exciting.

Melbourne's top burger joint is Huxtaburger, and the small Collingwood burger place has quickly earned an international reputation for the best burger offering in Australia.

Other operators such as The Pantry and Trunk Diner have created high-quality burgers that provide customers with a premium experience within a casual dining offering.

CBRE's head of Melbourne retail leasing Zelman Ainsworth said it was exciting to see how Australia's top hospitality operators created or reinvigorated concepts to keep their businesses at the top of the food chain.

"This type of entrepreneurship from retailers across all categories ensures that the Melbourne CBD retail market maintains record low vacancy levels and strong rentals," Mr Ainsworth said.