Sydney's appetite for fine-dining restaurants is dwindling, with affordable eateries taking up increased retail floor space in the past few months.
After the highly publicised closure of the Becasse restaurant in Westfield Sydney, there has been a reshuffle of tenants. Jones the Grocer, Laduree and Moochi are all new tenants at Westfield Sydney.
The director of retail leasing at Knight Frank, Alex Alamsyah, said Jones the Grocer would take over the Becasse Group and replace Becasse/Quarter Twenty One in December, and would also operate Charlie & Co and Becasse Bakery.
Laduree, the king of macarons from Paris, is coming to level three at Westfield Sydney in a luxury kiosk set-up, while Moochi's frozen yoghurt from Strathfield has opened at Westfield Sydney's basement level.
Haigh's Chocolates is taking up space in the Queen Victoria Building, while Josophan's Fine Chocolates, from Leura in the Blue Mountains, has a new store at 66 King Street. According to the latest Sydney Retail MarketView report from CBRE, the recent closures of upscale establishments Becasse and Quarter Twenty One are representative of a consumer shift towards cafes, inexpensive restaurants and takeaway outlets.
The senior manager of retail services at CBRE, Leif Olson, said such high-profile restaurant casualties had created opportunities for emerging food and beverage concepts.
''The success of Jamie's Italian on Pitt Street, Fratelli Fresh's Cafe Sopra on Bridge Street and Chiswick in Woollahra shows Sydney diners' hunger for well-priced establishments.''
Following their lead is China Republic, which is opening 1000 square metres at World Square Shopping Centre next month.
CBRE has been appointed to lease both the site of Justin North's recently closed restaurant, Etch, in the InterContinental, and the former home of the renowned Bilson's within the Radisson Blu Hotel.
CBRE's report says that while retailers of all categories remain cautious in their plans for expansion, the city centre continues to experience strong demand from lower-priced food outlets, as well as banks and health funds - all of which experienced rises in total retail floor space occupied in the year to April. At June 2012, net face rents for CBD super-prime retail space ranged from $5525 a square metre to $10,525 a square metre.
CBRE's report shows indicative rents declined by 0.5 per cent to $7525 a square metre, representing a 6.6 per cent decrease over the year from June 2011.
This was from falling turnover, which made it difficult for retailers to maintain high occupancy costs and for landlords to achieve rental growth. According to Mr Olson, in the next 12 months there should be an increase in the expiration of leases that were signed at the peak of the market.
''As part of the renewal process, new tenants may not be willing to maintain previous rental levels,'' he said. ''However, over the next three years to 2015 we are expecting to see net rents increase by 0.85 per cent, 2.83 per cent and 3.77 per cent for super-prime, prime and secondary CBD retail space, respectively.''
Source: The Age, 11 August 2012
