High-end hospitality tenants are flocking to capital city CBDs as the industry gains significant pace post-COVID-19 and in spite of cost-of-living pressures. Melbourne is continuing to see top-tier food and beverage tenants move in at similar rates to last year when 120-plus hospitality venues openings during 2022 set a new CBD record. The fresh venues comprised cafes, entertainment and recreation venues, nightclubs and cafes as well as restaurants. In Sydney’s CBD, a notable number of top-tier food and beverage operators have been snapping up prime space since the middle of last year, while Brisbane is also set for a higher-than-usual volume of stylish hospitality venue openings later in 2023.
Post-COVID deals for attractive sites were among several drawcards for high-calibre operators said Knight Frank’s associate director of retail leasing Adam Tyler. Other drivers were the pandemic-led shifts toward requiring bookings to be secured with credit cards and fixed times for sittings, both of which had largely remained in place and give operators more certainty over income.
“Pre-paying with a credit card to secure a booking has become the norm,” Mr Tyler said. “Fixed sittings are also now the standard for top-tier restaurants and give greater certainty to restauranteurs who are able to flip their tables several times per night with a guaranteed income. On top of this, spend per head has been up and many food and beverage tenants are reporting better turnover since COVID. Many operators have been so successful they are expanding their venues, leasing more space to open more eateries.”
Top-tier restaurants also had staff “ready to go” when lockdowns ceased, Mr Tyler added, which allowed them to get back to work faster and therefore take advantage of the higher vacancy rates and tenant incentives. Among leasing deals negotiated this year so far by Mr Tyler are:
- 4-6 Bligh Street –A 369.9sq m space leased to Liquid & Larder from landlord Holdmark, the venue will be the group’s fifth in Sydney and is scheduled to open in late 2023.
- 171 Clarence Street – The Bentley Group has leased a 276sq m space from landlord Terraform Capital, also the group’s fifth Sydney venue.
- 9 Castlereagh Street, Sydney – The Grounds of Alexandria has leased 250sq m from landlord Charter Hall.
- 92 Pitt Street – Swillhouse Group has leased a 452sq m space from City Freeholds, the group’s seventh Sydney venue.
- 89 York Street – Pinky Ji has leased a 300sq m space from Fife Capital, with the restaurant recently opening. This is the second Sydney restaurant for Jessi Singh, who has already opened restaurants in Melbourne, Adelaide and Byron Bay.
- 66 King Street – The Charles by Etymon Group has leased 1045sq m from a private landlord, which is one of four venues for the group.
Another notable development will be the move to Paddington’s The Grand National Hotel by pioneering upmarket fish restaurant Saint Peter’s at the end of 2023. The new-look eatery will feature a 45-seat restaurant, bar and boutique hotel.
Similarly in Melbourne, more retail and hospitality tenants have been committing to leasing CBD space. Commercial property agency Fitzroys is among those benefitting from the uptick, with its CBD leasing team striking eight new deals with tenants in food and beverage, speciality and service industries. “There are multiple tenants with a successful track record of CBD trade that have witnessed the post-COVID rebound in CBD visitation for themselves and decided to invest further in the city to open new locations,” says Fitzroy’s division director James Lockwood in the agency’s Walk The CBD report Walk The Strip - Volume 5 | Fitzroys.
Also indicating rising confidence are the suburban operators training their sights on the city. Opening in Makers Lane in the new NAB headquarters at 405 Bourke Street are Hawthorn’s Supernova Coffee and South Yarra French patisserie La Yeahllow. Supernova Coffee is known for its Ninety Plus roast and a Yuzo style that is among the world’s most expensive coffee at $198 a cup, while La Yeahllow is feted for elegant cakes and desserts. “There’s clearly confidence that the workforce will continue to steadily return in 2023 and businesses are making commitments based on these expectations,” Mr Lockwood says in the report. City Of Melbourne data also shows weekend CBD visitation rates heading into last summer were higher than pre-pandemic 2019.
Among the higher-than-usual number of stylish hospitality operations opening this year in Brisbane are Shortgrain, spearheaded by the ex-executive chef of the Sydney and Melbourne iconic upmarket Thai restaurants Longrain, the Asian-inspired concept Supernormal by Melbourne’s renown Trade House group, and Bunker Barre, a high-end restaurant to be located in the World War II-era bunkers beneath the Thomas Dixon Centre. Located in the city’s hip West End, the Thomas Dixon Centre is home to the Queensland Ballet and recently underwent a $100 million makeover. Shortgrain is scheduled to open in Fortitude Valley later this year while Supernormal is taking shape within the prime location of 443 Queen Street in the heart of Brisbane City.