Feng Lou opened his glitzy Chinatown bar after a $2 million fitout late last year. Trade was good before it slumped over the summer lull, but now it’s bouncing back.
Called Lost, Lou’s Little Bourke Street bar is at the cusp of a wave of hospitality, entertainment and food operators to push Melbourne’s once sky-high retail vacancy rates to fresh lows as they look to profit from the city’s booming nightlife.
Customers at Lost Bar in Chinatown.Credit:
The robust evening economy is one of four things driving the city’s post-COVID retail recovery, says commercial agency Fitzroys in its latest “Walk the CBD” report on vacancy rates.
Coupled with an uplift in workers returning to city offices, a full events calendar and soon-to-be-completed work on key stations of the new Metro railway tunnel, it is spurring demand from retailers wanting to set up in city buildings, said Fitzroys’ James Lockwood.
Hospitality, food and beverage, and entertainment retailers, took nearly half of all available leases in the past 12 months, up from 34 per cent at the start of 2023. Retail vacancies have fallen over the past year, from 8 to 6.1 per cent, well below a peak of 14.1 per cent two years ago.
“There are more people out at night than during the day in the city,” Lockwood says.
His view is backed partly by pedestrian street counts across Melbourne’s CBD. The city’s pedestrian counting system shows foot traffic at busy intersections on Swanston Street tends to peak between 5pm and 7pm. In fact, foot traffic at that time is a third higher than it is from 8am to 10am, City of Melbourne data shows.
“Shoppers are flocking to retail precincts like Bourke Street Mall and Melbourne Central after hours, and we’ve supported this trend towards twilight trade in partnership with the Australian Retailers’ Association,” Lord Mayor Nick Rees said.
Lockwood said retailers had returned to Swanston Street with a vengeance after large portions of the thoroughfare were shuttered during the pandemic. Vacancy now stands at about 2.6 per cent.
