High End Fashion Follows the Money

As Tiffany & Co prepares to take up residence on King Street in the city and a number of other luxury brands sign leases along the retail strip, several projects under construction in the CBD are attracting national and international brands.

Switzerland-based clothing retailer Bally will be the first of the new lessees to move in to King Street, joining existing luxury brand Gucci.

Prada and Chanel are also believed to be in the process of negotiating deals.

Rents on King Street are understood to be between $3,000 and $4,000 per square metre.

Perth’s new retail developments are also attracting major national and international brands.

Mirvac’s $125 million redevelopment of the Wesley Quarter site is believed to have secured Melbourne-based boutique Alannah Hill, although WA Business News understands the site was turned down by UK-based fashion house Karen Millen.

Clothing retailers Zimmermann and Calibre are also believed to be considering sites in the building, although no formal leases have yet been signed for the precinct.

Leasing of the retail portion of the Century City project, to which National Australia Bank will relocate, is expected to be finalised by the middle of the year, with the project scheduled for completion in the first quarter of 2009.

Lease Equity retail property analyst Michael Richardson said that, in the past two weeks, several big clients had been signed for the complex at 100 St Georges Terrace, one of which would anchor the podium level.

Mr Richardson said the company was targeting stores with a high turnover, which could drive traffic to other retailers, rather than luxury boutiques with smaller turnovers.

“We’d be disappointed if we didn’t turn around at least $20,000/sqm.

Our target is aspirational but attainable brands,” he said.

Leases for 140 William Street are also close to being finalised, with an international fashion retailer expected to sign a deal to establish its flagship Perth store.

In total, the site will contain about 50 retailers, consisting mainly of fashion retailers and food outlets.

Colliers International associate director retail leasing, Richard Cash, said interest in the site had been strong, with rents for the deals comparable to those being signed in the Hay Street and Murray Street malls.

“We are getting north of $4,000/ sqm for the space, which is basically where the market is today,” Mr Cash told WA Business News.

“I’ve been offered close to $5,000/ sqm for smaller tenancies between 30 and 40sqm at the moment.” Rents for retail space in the CBD malls hit a record in December, with Travelex leasing its 66sqm Murray Street site for $4,250/sqm.

However, CB Richard Ellis senior negotiator Martin Tavra said it was unlikely that rents for other sites in the area would achieve this.

“I don’t see how the balance of the (Murray Street) mall could pay that sort of money.

I would say it would be more likely that rents will range between $2,500/sqm and $3,500/ sqm, depending on the location,” he said.

Mr Tavra said eight deals were due to be completed for Raine Square, with two supermarket tenants being considered for the site.

Sites in the GPO Building, which is also being managed by CB Richard Ellis, are in the process of being signed.

Two of the eight shops to be completed in stage one have already been signed by Australia Post.