Australians’ appetite for luxury retail and fine dining continues to soar despite interest fears9 May 2023
Australians’ appetite for fine dining continues to rise despite current economic challenges as the luxury retail market performs exceptionally well across the nation’s CBDs.
Many retailers are seeing growth above pre-pandemic levels, with the sector performing remarkably well being the luxury retail market, as spending expects to increase by +5.42% annually through 2027, primarily driven by millennials.
Data released by the Australian Bureau of Statistics in March 2022 indicates that ‘Millenials’ (ages 25 to 39) have overtaken Baby Boomers as the largest generational group in Australia, accounting for 22% of the population (5.6 million people).
Nik Potter, Associate Director of Colliers Research, explained that 62% of Australians under 39 currently do not own a home, meaning that the rising interest rates impact them less.
“When we couple this demographic with the higher savings rates and record low unemployment, it starts to present a segment of the Australian economy with a potentially high-level disposable income, who are immune to the current variability of rising mortgage rates, and keen to enjoy fine dining experiences across our CBDs, especially after the pandemic.”
“In Australia, retail spending in restaurants and cafes grew +25.34% year on year in December 2022 and is currently sitting at +26.72% on a Moving Annual Total (MAT) basis to January 2023, with Sydneysiders and Melbournians having the biggest appetite currently sitting at +36.94% and +34.9% respectively,” Mr Potter said.
In 2023, 13 new high-end restaurants have already opened in Sydney’s CBD and fringe, while Melbourne has welcomed nine new premium dining experiences in the CBD and metro, with another four venues expected to open their doors in each city in the coming months.
Director of Colliers Retail Leasing, Adam Lester, said, “Fine dining food and beverage is currently Melbourne’s highest performing retail sector, with a surge in enquiry for high-end hospitality options within commercial buildings.”
“We are currently experiencing a high volume of requests from landlords seeking more premium brands to occupy their spaces, as well as premium restauranteurs looking for flagship opportunities within the city,” said Mr Lester.
In response to current demand, a 1,500sqm of premium hospitality space across three levels has just been brought to market in the fully refurbished commercial building on 85 Spring Street, presenting a unique opportunity for a high-end hospitality operator to secure a flagship venue in Melbourne’s prestigious CBD East End precinct.
The property is surrounded by several significant projects, including the state-of-the-art Wesley Place office precinct by Charter Hall and the new 5-star flagship Shangri la Hotel at Sapphire by the Gardens, where the Colliers Residential team is about to break the record for an apartment sale in Melbourne, with the penthouse currently under offer around $39 million.
Tom Larwill, Manager of Colliers Retail Leasing, “Melbourne’s East End is known for being the high- end part of the CBD and has evolved significantly in recent years to become home to Melbourne’s most premium residential, hotel and commercial developments.”
“Being surrounded by many of the CBD’s largest institutional grade developments provides an opportunity for local and international operators to capitalise on the evolving East End precinct and explore a range of premium hospitality options,” Mr Larwill concluded.