Despite challenging conditions, luxury retailers are increasing their presence in the Sydney CBD and pushing vacancy rates down.
According to a Ray White survey of the Sydney prime retail core (bound by Martin Place, Castlereagh, Park and George streets) the area has recorded total vacancy at 8.3 per cent, down from 10.2 per cent in January 2023.
The area described as “super prime”, being the Pitt St mall precinct, has zero vacancy after reaching 8 per cent last year.
Ray White Group Head of Research, Vanessa Rader, said luxury retailers continued to grow their footprint.
“This year we have seen luxury retailers account for 25.7 per cent of all shops surveyed, up from 23.3 per cent 12 months prior,” Ms Rader said.
“The greatest concentration of these luxury retailers is found across King St, representing more than 70 per cent of shops, with Tiffany at its centre on the corner of Pitt St.
“Luxury retailers are dotted across the city and represented in most streets surveyed, however, the Pitt St precinct, including the mall, is home to a range of international and domestic brands including some flagship retailers like Zara and the new Lego store.”
Ms Rader said the growth in luxury retailing did not align with the overall change in sentiment surrounding retail turnover, however, the ongoing growth in tenancies in this segment is testament to the high profile Sydney CBD location on the world’s stage.
“Many of these retailers call Sydney’s prime retail core home for their single Australian location or flagship offering,” she said.
“With Sydney home to more than 800 international flights per month, visitors to the region are approximately 30 per cent higher than any other city in Australia, with the southern and central Asian region a key growth market.
“These visitors have been key to the growth in the luxury sector and their ongoing vibrancy within the Sydney CBD retail precinct, growing away from traditional luxury locations of Castlereagh St to extend down King St into George St.”
According to Ms Rader, across the broader region there have been limited change in the make up of retail in this core Sydney CBD retail area.
“Clothing and soft goods make up 33.2 per cent of all shops, slightly up from 31.1 per cent last year, with a growth in footwear and womens fashion driving this,” she said.
“Similarly, the other personal and household goods have increased due to some new jewellery and accessory stores.
“We expect food retailers to continue to grow their footprint across the CBD capitalising on a more lively weekday trade as staff return into the city, coupled with tourists and local shoppers.”
She said the service industry has been a big growth sector for retail, notably nails, finance, and hair services, particularly in local high street retail locations.
“In the Sydney CBD retail core we have witnessed a small decline this period, bringing the region back to a true retail experience of years gone by, where weekend window shopping, trying on clothes and stopping for a coffee was the priority rather than stopping in for a medical or beauty procedure,” she said.
