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Chapel Street woes continue – but there are still a few pop up shops


Media discusses the challenges of Chapel Street tenancies and retail (but not pop up solutions)

Quite recently the esteemed Australian Financial Review published a real estate article titled Chapel Street retailers battle unreasonable landlords as vacancies surge (16th May 2018) – discussing the tough times as tenants suffer landlord demands on Chapel Street – “once Melbourne’s premier shopping destination”. It seems many landlords have been unwilling to adjust their rents (downwards…) as retailers faced the challenges of online retailing and the “exodus of brands to the CBD and mega malls”. As a result, Chapel Street is “now lined with For Lease signs stuck on shop windows, where interiors have been abandoned leaving unopened mail scattered on the floor and empty shelves and clothing racks”*

The article quotes various local identities – a couple of Chapel Street retailers, a commercial real estate director and the head of trader’s association Chapel Street Precinct. Their comments were generally optimistic about the future of the shopping strip (of course…), the agent saying he believed Chapel Street (vacancies) were “now at the bottom of the bell curve”. A few major construction projects (“currently detracting from the vibrancy of the strip”, according to the agent) would herald “significant improvement… over the coming years” said the chief of the trader’s association.

The article has a couple of inaccuracies though – spouting some “figures” which are vastly different from reality. The journalist quoted the local agent’s tally of 17 vacancies – but on a walk along that same South Yarra strip yesterday (between Malvern and Toorak Roads) I counted 36 shops “For Lease” or just vacant (no lease signs) – plus another 3 businesses closing down… that’s more than double the AFR’s report. The journalist also described the “four-kilometre long Chapel Street running through the suburbs of South Yarra, Prahran and Windsor” – but the retail stretch is actually 2kms (between Dandenong Road and Toorak Road). I suppose reporting fewer vacancies along a longer stretch might dilute the situation a little…

Just a couple of days later the Herald Sun newspaper also described Chapel Street as “a shy retail graveyard, with dozens of shops closing their doors…”#

I spoke to a couple of retailers on my walk yesterday. One guy said the issue of vacancies isn’t just a Chapel Street problem… it is everywhere (Fifth Avenue New York has 17% vacancies – and once-vibrant shopping destinations in many other major cities are similar) and should be considered in a global context. He suggested something which could improve Chapel Street “overnight” would be banning the placement of those For Lease signs on shop awnings (a sign in the window would do just as well… no one searches for new premises via billboards anymore). The effect of destroying that forest of agent’s advertising might help to dilute the perception of a retail exodus.

The same trader said he wasn’t in favour of pop up shops though… “they are bad for business”. He wasn’t just concerned about the competition at street-level – the (temporary) shop-keepers who don’t invest the time and resources to grow a business nor invest in the local community, but also they way they under-cut quality brands with their discounted stock (and that has an effect right along the supply chain… impacting wholesalers, manufacturers and suppliers). He didn’t believe that pop up might be good for Chapel Street, even as an interim measure ‘till the strip recovers.

There are several pop up shops along Chapel Street now. Some are proudly promoting their temporary tenancy with “pop up shop” signs on their windows, whilst others are more discrete about their limited stay. Some of those pop ups have taken advantage of short-term leases to test the waters before making any commitment to Chapel Street… others extend their tenancies month by month as sales stay healthy and they’re still moving inventory.

I’ve said this many times before – Chapel Street could (and does….) benefit from pop up stores. The variety and experiences offered by those budding new pop up businesses helps to keep visitors (…shoppers…) coming to the strip. And those extra feet do support the perception that Chapel Street is still a premier shopping destination – almost in defiance of the regrets of other retailers and those stubborn (rent-hungry) landlords.

This is now my 3rd instalment on the woes of Chapel Street (but not since December 2016 –  What’s up on Chapel Street ? (2)) I guess I’ll just keep watching and commenting… (and seeing new pop ups come and go… despite some local resistance !)


* source : / Chapel Street retailers battle unreasonable landlords as vacancies surge

# source : / Melbourne’s hottest shopping strip now resembles a retail graveyard


478. Chapel Street woes


images :  Chapel Street,

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