Jamie Oliver's Sydney premises highlights appetite for eatery space
As food guru Jamie Oliver prepares for the September opening of his new restaurant at leased premises in 107 Pitt Street in the Sydney CBD, demand for retail space from restaurants, cafes and takeaways continues to remain strong and defy the overall retail trend.
Oliver is currently refitting his first Jamie's Italian in Australia, which will cater to up to 200 guests at the Pitt Street location.
According to CB Richard Ellis agents James McNeill and Leif Olson, the arrival of the English restaurateur will enhance the city's array of international eateries.
In its latest report on the NSW retail market, CBRE notes that the café, restaurant and takeaway subsector has achieved annual sales growth of 5.8% for the year to June 2011.
In contrast to the fashion sector, down 5.2% for the year, Olson says the food sector is up as NSW households have “wined and dined their way through the first half of the year”.
As a result CBRE retail is fielding “a number of enquiries from noted Sydney establishments seeking opportunities in the lower north shore and eastern suburbs”.
This growth has come against a backdrop of lacklustre overall retail growth in Sydney, with prime rents falling by 11% over the previous year to an indicative $2,473 per square metre and further rental reductions expected in the short term as national retailers closed underperforming stores to focus on Pitt Street Mall locations.
BlackRock Property Trust, landlord of the building at 107 Pitt Street, where Oliver has lease space, notes that it has been successful in concluding leasing transactions throughout the March quarter of 2011.
The café, restaurant and takeaway subsector is further benefiting from City of Sydney’s introduction of the Liquor Amendment (Small Bars and Restaurants) Bill 2007, designed to stimulate the CBD’s laneways.
“Sydney’s western corridor is a particularly popular small bar precinct, as the location captures foot traffic from the surrounding offices. Among recent additions to the western corridor are Shirt Bar and Grandmas Bar,” McNeill says.
Commenting on the launch of his Sydney eatery, Oliver says Australia has always been close to his heart since he first visited around a decade ago.
“I get a lot of wonderful tweets and emails from Australians who have eaten at Jamie’s Italians in the UK, so now to have a Jamie’s Italian open in Sydney is really special for me,” he says.
Other notable food retail openings include Westfield's Food on Five food court in the new Pitt Street Mall flagship mall, Cuban restaurant and bar La Bodeguita Del Medio at 125 York Street and Stitch Bar at 61 York Street.
Development applications have also been lodged for a new Fratelli Fresh in the basement of the Burns Philp building at 7 Bridge Street and a new Pie Face store at the corner of Bridge and George streets.
John Bowie Wilson, director of CBD sales and investment services at Colliers, told the Sydney Morning Herald the expansion of the food and beverage offerings was ensuring owners of inner-city buildings were able to fill vacancies left by traditional retailers.
"While traditional retailers are losing market share to websites, food and beverage operators still need shopfronts," he says "The lower price point of cafes and restaurants and the non-discretionary nature of food sales mean that turnover has not declined to the extent of other retail categories.”
Other recent sales of restaurants and cafes have included the Spicy Sichuan Restaurant in Cunningham Street for $4.3 million; Fratelli Fresh store and cafe in Hickson Road for $3 million; 8 Quay Street in Haymarket for $8.2 million and the Belgium Beer Cafe in Harrington Street for $4.2 million.
Colliers has also noted increasing inquiry levels from international operators who viewed the Sydney economy as more robust than other global centres.
According to the CBRE report, consumers are continuing to adopt a “wait and see” approach to retail expenditure with fashion retailing, one of the harder hit subsectors.
