At the moment there are 36 shops vacant and up for lease on Melbourne's once iconic fashion and hospitality strip, Chapel Street in South Yarra. Are things starting to turn around? The strip has seen a sharp decline of retail tenants, as high end brands desert the strip. With the nearby Chadstone Shopping Centre attracting more luxury brands, some parts of Chapel Street are nothing like they once were.
High rents have impacted the area, with some businesses not able to afford the rent as foot traffic drops. For example, Timberland were paying $126,000 annual rent for their store at 417 Chapel Street, an amount the international brand could not sustain. That shopfront has now been vacant for the past seven months.
The Locals are Optimistic
On the back of some huge new commercial and residential real estate developments, local industry figures in real estate and business are confident things will turn around for the whole street in the coming years. There is now more of a focus on hospitality businesses, rather than the more traditional fashion retail outlets.
The Windsor End is leading the Way
The Windsor end of Chapel Street is already a major hospitality hot spot for Melbourne. New restaurants are popping up all the time at that end of the street. It is expected the trend will continue to flow to the South Yarra end. Vince Diaco, one of the owners of the bar and restaurant Rebel Blue at the Windsor end, said commercial property real estate landlords have been open to all sorts of ideas to reinvigorate the strip.
"I think that the area has been very accepting of small business owners and our crazy ideas for restaurants," he said. "It's amazing to see how the restaurant and bar culture has grown in this pocket of Windsor. We are so excited to be part of it. I think it's growing every day and the future is so bright for the area."
Major New Developments are happening
The plan is that new developments in the area will restore Chapel Street to its former glory. Here’s some of the projects underway.
Currently under construction on the Toorak Road corner is the Capitol Grand development which is the brainchild of developer Larry Kestleman's LK Property Group. The development will feature a 50 floor tower that has three floors of retail, including a David Jones Food Store.
Mr Kestleman believes the development will bring that corner of Melbourne back to its former status.
"I'm a passionate Melbournian, and passionate about our culture. A big part of which is that experience of high-street retail integrated with dining. It’s that unique atmosphere Melbourne has been famous for since the 1850's."
Christian Numa, Principal of the Amity Property Group, said there has been strong interest from retailers in the development. "Premium retailers have seen the profile of the Capitol Grand residents, and like David Jones, have shown interest based on the proximity to this demographic".
The famous Jam Factory precinct at 500 Chapel Street, South Yarra is set to be transformed, with the local Stonnington Council recently giving planning approval for Newmark Capital to build a new business, retail and entertainment precinct, including a 15 story tower. There will be five separate buildings. 25 per cent of the development will be office space.
The Jam Factory development will encourage other retailers into the neighbourhood. That’s good news, as that area of Chapel Street has seen the most shop closures in the past few years.
402 Chapel St
The classic cafe Cafe Sienna has been torn down, as have the shops next to it for this huge new development on Chapel St.
The new development will feature the Aloft Hotel, and commercial and retail spaces.
Chapel St may not look like much now the South Yarra end of the street, but it is transforming
Cato Square - Prahran
Construction is well underway at the Cato St Car Park development. The location to be known as Cato Square will included two below ground car parking levels, increasing the car parking to 500 spaces. Above ground, the area will include two cafes in its 9000sq metres of open air space.
The $60 million project is due to be completed by the end of 2019.
"Cato Square will create urgently needed open space for recreation, events, festivals and markets. There will be a 20 per cent increase in car parks for shoppers in the surrounding Chapel Street and Greville Street precincts," Stonnington Council said in a statement.
"Cato Square will become an iconic cultural and recreational destination for residents, businesses, shoppers and visitors to Stonnington, with spaces for quiet contemplation or vibrant community events."
The Next Chapel Street Chapter is being written
So while Chapel St as we once knew it might be a little flat at the moment, these new developments are set to transform the area. Once again Chapel Street will be known as one of the most desirable streets in Melbourne for small businesses, retailers, and shoppers from across Melbourne and around the world.