08/10/2008 - 22:00

King Street home for Kailis outlet

08/10/2008 - 22:00

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WESTERN Australian pearl jeweller Kailis is preparing to move to premises in King Street, having leased the long-vacant site at number 29 between luxury international labels Gucci and Bally.

King Street home for Kailis outlet

WESTERN Australian pearl jeweller Kailis is preparing to move to premises in King Street, having leased the long-vacant site at number 29 between luxury international labels Gucci and Bally.

The company will occupy both floors of the building, with ground floor retail space and its marketing and sales divisions upstairs.

Kailis general manager Sonia Mackay-Coghill said the King Street site would be the company's fourth and flagship store.

"Part of our strategy has been to identify A-grade locations and King Street is a good retailing area," she said.

Kailis, which has existing stores in Claremont, Fremantle and Broome, is also expanding its retail partnerships overseas, particularly in the US, targeting small, high-end retailers as distributors.

Meanwhile, existing King Street operator Watches of Switzerland is relocating to the corner site formerly occupied by long-term tenant, Cino to Go, which closed its doors in late June after failing to renegotiate its lease.

The cafe had operated from the site for 10 years.

Watches of Switzerland, which is preparing a fit-out of its new premises, will double its retail area in the move, from 700sqm to 1,400sqm.

Fashion house Prada is also expected to open a King Street outlet soon, in the site previously occupied by Perth Star Newsagency.

CB Richard Ellis research analyst Michael Olsen said tenancy movement in King Street was likely to continue.

"It's developed into a precinct of its own, particularly with the new office developments in the city. West End retailing has been revitalised," he said.

Rents on King Street range from about $3,200 to $3,800 per square metre, following 12 months of strong growth, and are expected to continue to rise.

"There will be some rental pressure maintained and it's likely that a lot of properties will come up for rent reviews, so there will be some turnover [of tenants]."

Elsewhere in the CBD, super prime rents for the main mall frontages have reached indicative rates of $3,800/sqm to $4,750/sqm, with a gross average of about $4,500.

Some leases, particularly in new developments such as Century City, are believed to have hit $5,000/sqm, although Mr Olsen said rents were unlikely to push much higher.

"I think rentals in traditional CBD retail areas have probably come close to a peak growth," he said.

"Obviously in the current economic climate, we may see some more growth but definitely not at the rates we've seen over the last few years, in excess of 25 per cent.

"The new supply will also create a little less pressure, however we don't expect there will be an oversupply, because the demand for this is either coming from existing retailers that need to expand, or new retailers coming to Perth."

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