Food and beverage operators are showing a greater appetite for retail spaces that allow them to readily take advantage of the increased takeaway and home delivery demand that has been fast-tracked in recent months, according to Fitzroys 2020 Half-Year Hospitality Commentary.
Smaller retail spaces across Melbourne are being snapped up by food and beverage operators adapting to changes in the hospitality sector, according to Fitzroys.
The agency has secured 72 leases since the State of Emergency was declared, including 45 retail deals.
Fitzroys Associate Director, James Lockwood said 48 per cent of these had been to hospitality tenants, and almost all had taken place throughout Melbourne’s famous shopping strips.
Fitzroys 2020 Half-Year Hospitality Commentary - At a glance:
“This is quite amazing considering the restrictions have affected a number of cafés and restaurants,” he said.
"Coming into this year, food and beverage operators accounted for around 29 per cent of tenants throughout the retail strips, according to Fitzroys research."
12 Hinkins Street, Moonee Ponds has been leased to the New York Pizza Department in a deal negotiated by Fitzroys. Source: Fitzroys
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Mr Lockwood said more operators were opting for smaller spaces that can offer quick meals and are more conducive to takeaway and delivery service.
“Use of delivery services such as UberEats and Deliveroo have been on an upward trajectory for some time, and this has been fast-tracked during the COVID lockdown," he said.
He said enquiry from the food and beverage sector is bouncing back as operators actively sought emerging opportunities to adapt to the changing environment and capture existing and new markets, adding properties with existing kitchen infrastructure were moving quickly.
“Smaller, fitted-out spaces allow operators to maintain a presence in the market without necessarily having to commit to extensive fit-outs or higher rents for larger spaces," he said.
"An added attraction of retail strip properties of these types often attract rents from around $50,000 to $75,000 per annum, as opposed to leases at circa $100,000 per annum in the CBD.
“Tenants are risk-averse and almost all leasing transactions have been struck under $100,000 as tenants are not willing to take on higher rentals.”
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