Inner-city hipsters are underpinning retailers in vibrant Smith Street, where vacancy fell to 2.7 per cent, and in trendy High Street in Northcote, which recorded vacancy of 3 per cent.
Both streets are hospitality and nightlife hotspots and have seen a corresponding surge in apartment developments nearby.
The number of empty shops in Brighton’s upmarket Church Street rose slightly to 2.7 per cent, but that was from a near-full 1.3 per cent the year before.
Even Bridge Road, once a retail basket case and a harbinger of things to come for the sector, appears to be recovering.
Two years ago, one in four shops in a section of the strip between Lennox Street and Punt Road were vacant. Now that figure has fallen to 17.6 per cent, estate agency Fitzroys’ latest Walk the Strip report shows.
It’s a shift Fitzroys director David Bourke attributes to the rise of service retailers – shops occupied by lawyers, medical, health and skin-care clinics, dentists, optometrists, masseurs, fitness studios and gyms.
There was a broad lift in the proportion of service retailers across the surveyed shopping strips over 2018-19, with 26 strips showing an increase, he said.
In previous surveys, food and beverage tenants were on the rise.
“People love their local villages. Melbourne’s iconic retail strips continue to reinforce their position as the heartbeat of their local communities,” he said.
The healthy vacancy rates will be music to the ears of self-managed super fund investors who have piled into commercial retail real estate looking for better returns and capital growth.
Their investment interest has hardly slowed a beat, even as consumer sentiment slumped and the economy is battered by slow wage growth.
Last week a classic two-storey Victorian terrace at 947 Burke Road, Camberwell, transacted on a sharp 4.3 per cent yield in a deal negotiated by agents Chris James, Jordan Ceppi and Chris Kombi.
It had a new 5+5-year lease to Classique Nail Spa and sold for $1.72 million.
Another shop in Ashburton changed hands for $1.77 million on an even tighter 3.9 per cent yield through Teska Carson’s George Takis, Fergus Evans and Larry Takis.
That building, at 253 High Street, was fully leased to two tenants for $70,904 per annum net.
But not all streets have found equal favour with shoppers.
The once-thriving Lygon Street is under siege from rising vacancies. Renowned as Melbourne’s Little Italy dining mecca, at least 13.5 per cent of shops in the street are empty, up sharply from the year before when 5.6 per cent were looking for tenants.
Chapel Street’s well-recorded woes have eased marginally, but vacancy at the South Yarra end of the street was still near a record high of 15.6 per cent.
Property Editor at The Age and BusinessDay journalist for Fairfax’s theage.com.au, smh.com.au, watoday.com.au and brisbanetimes.com.au.