Introducing Fitzroys’ annual Walk the CBD retail precincts market report, detailing how and why Melbourne CBD retail vacancies have again decreased over the past 12 months. This year we feature research and insights into 14 of the CBD’s key retail precincts.
Melbourne’s CBD retail vacancies have hit a long-term low as the reshaping of the city draws big crowds at critical times of the week – and big spending – spurred by the completion of major developments and the opening of new retail and hotel offerings.
Fitzroys Walk the CBD – the industry standard report for retail vacancies and tenancy mixes within Melbourne CBD’s precincts – vacancies have reduced for a fourth consecutive year, from 6.1% down to 4.6% over the past 12 months.
In the depths of COVID lockdowns, retail vacancies had risen to over 30%.
Hospitality, food and beverage and entertainment operators have again been the driving force of enquiry and take-up. Over the past year, the segment increased in representation of the overall tenancy mix to 49.4%, rebounding from less than a third as Melbourne emerged out of lockdowns.
This year’s Walk the CBD also found:
• The CBD is shifting towards a more dynamic economy.
• The proportion of retail space occupied by service retail eased to 13.5%, and specialty retail lifted modestly to 31.2%. The count takes in all street-facing shops, including those within arcades and shopping centres.
• Development sites nearly halved to 1.2% as major projects reached completion.
The reshaping of Melbourne’s CBD has translated into long-term lows in vacancies, a new retail landscape, and an unmistakeable newfound buzz
The Melbourne CBD has reaffirmed its role as the cultural and financial heartbeat of Australia’s fastest-growing city. 1
Retailers have really come into 2026 optimistically, and the city’s had a fantastic start to the year.
Major completions reshape critical pieces of the CBD
Critical parts of the city have been transformed with the completion of major infrastructure and property projects.
The Metro Tunnel began full services at the beginning of February, bringing an extra 50,000 people into the city each day.
For Swanston Street - the bellwether for the city’s struggles in the depths of COVID lockdowns – the vacancy rate tightened further to a sensational 1.9% as retailers sought to be close to the tunnel entrances of the Town Hall and State Library stations ahead of their opening.
Retailers were eagerly anticipating the completion of the Metro Tunnel, which has made a hugely positive impact on Swanston Street.
The tunnel entrances have also boosted pedestrian traffic along Collins Street.
Bourke Street Mall saw the opening of the Mecca flagship store in the former David Jones building, which has prompted a surge of visitors along the famous strip. It also saw the completion of the $150 million Melbourne Walk, which replaced the former Walk Arcade with 6,000sqm of retail space, including a new JD Sports flagship, and two IHG hotels – Hotel Indigo and Holiday Inn – bringing circa 450 rooms to the immediacy of the area.
The mall was also boosted by 900 staff at advertising agency Clemenger moving into its new offices above Mecca, adding further to the daytime activity.
Bourke Street Mall’s vacancy rate was recorded at just 4.0%.
Retailers have been be really responsive to the shift in retail demand and changing habits of visitors to the CBD.
Successful CBD tenants have worked out over the past few years when people are visiting the city, and how to maximise trade around those times. There’s an emphasis on the mid-week, and then on Friday nights and over the weekend.
The balance of more people entering the city over Friday nights and the weekends, and their combined spending power, is outweighing the lower visitor numbers being recorded on Mondays and Fridays.
Melbourne City Council reported a record $1.2 billion in total spending in December 2025. 2
More people are coming into the city to get a full day’s experience – they’ll go to the Mecca store, visit a restaurant or café to eat, then head to the NGV or the theatre district.
With the bigger outings comes bigger spending, and that’s reflected in another fall in retail vacancy rates and the buzz of the city.
This really reinforces that the people who come into the city aren’t predominantly office workers. There are Melburnians, tourists, residents and students who all bring something to the CBD.
Melbourne CBD’s office market comprises some 5.28 million square metres of floor space – second only to the Sydney CBD in Australia – and continues to support a large workforce moving around the city that makes a significant impact on retail activity every day.
With the huge retail and infrastructure activity that’s taken place recently, the CBD harbours a fantastic potential.
For businesses looking to be a part of the action, the most prominent enquiry has been from suburban and interstate operators right across the retail spectrum looking for smaller-format spaces.
From the enquiry Fitzroys is receiving there’s been a surge of businesses asking for small circa-20sqm to 50sqm and hole-in-the-wall spaces, looking to operate on a capitallight model while catering to those peak periods of the week.
These are the types of spaces that are moving really quickly.
Shops in a good location with high pedestrian activity are also moving very fast.
Only two of the 17 retail strips and precincts surveyed in this year’s edition of Walk the CBD saw an uplift in vacancy.
The headline act was Swanston Street further reducing from 2.6% to just 1.9%. It was beaten only by Little Bourke Street, which has seen plenty of activity around the Hardware Lane dining precinct in particular, at 1.1% (decreasing from 4.1%), and the section of La Trobe Street from Elizabeth to Russell returning with no vacancies at the time of reporting.
Chinatown vacancies improved yet again to 3.5% (from 6.6%), owing to the big numbers of diners coming into the city on Friday nights and weekends.
The demand for space in Chinatown has effectively seen the offering once concentrated on the eastern half of Little Bourke Street spill over and become a precinct taking in parts of Swanston Street, Russell Street, Exhibition Street, Lonsdale Street and Bourke Street.
1. abs.gov.au 2. theage.com.au
The revitalisation of Bourke Street Mall held vacancies at a low 4.0% for another year. Also coming in below the city-wide average was Flinders Lane, home to an array of Melbourne’s favourite dining institutions – Gimlet at Cavendish House, Supernormal, Cumulus Inc., Grill Americano, to name just a few – at 3.2%.
Russell Street was a big improver, reducing from 10.9% to 7.6%. This was driven by activity around the area near the mouth of Chinatown on Little Bourke Street. Chanel is currently redeveloping its store on Russell Street, Portuguese restaurant Marmelo opened and Japanese restaurant Miyaziku Gyu started serving diners from the former Izakaya Den space.
Another notable improver Elizabeth Street, where vacancies have reduced each year for several years, to now sit at 5.3%. The shift has been driven by the bustling northern section, propelled by recently completed residential projects and uni students that have created a 24/7 entertainment and dining precinct with a heavy Asian-centric focus.
The famous East end, or Paris end, of the city – the eastern half of Collins Street, home to some of the biggest luxury names in the world – saw vacancies increase slightly to 6.0%. The strip is set to be boosted by a redevelopment of the Grand Hyatt, which will revitalise the podium from levels four to nine, and introduce a new luxury retail and food and beverage precinct, while the opening of the Town Hall Metro station has reactivated the corner of Collins and Swanston Street.
Melbourne has added 5,000 hotel rooms across 22 buildings since January 2019 – showing a 21% increase in supply3. The IHG hotels pair of the Hotel Indigo and Holiday Inn at Melbourne Walk and the just-opened Mercure Melbourne La Trobe Street are part of a further 2,100 rooms under construction or opening across 10 buildings in the CBD over 2025 and 2026, as operators respond to the growing demand from interstate and international visitors.
Even with the huge increase in supply, Melbourne hotel occupancy was 2.6% higher in January than the previous year, peaking at a very high 93.2% during the Australian Open4. Hotels were reporting a high 90% occupancy for the Grand Prix, also higher than at the same time last year5.
Melbourne’s reputation as the sports and events capital continues to hold true. The Australian Open into the Grand Prix, the AFL season, finals series and Grand Final, and Melbourne Cup bring huge numbers of visitors across the year.
Melbourne also just had Coldplay and Ed Sheeran playing with hotels packed out in the city.”
There’s currently the added influence of American tourists visiting to take advantage of the cheaper dollar.
In response, major carriers United Airlines, Delta, American Airlines and Qantas have all significantly increased their capacity and flights to and from Melbourne and key USA destinations.
A roll-call of global luxury retailers such as Louis Vuitton, Gucci, Versace and Cartier dominates the famed “Paris end” of the CBD. Specialty retail accounts for 79.1% of shops – the highest of any strip or precinct in the city.
High-end retail continued its strong performance, insulated from global financial instability and helped further by Australia’s favourable exchange rate attracting more of the tourists visiting Melbourne.
The Paris end commands prime retail rents, with a long queue of retailers jostling to get in amongst some of the biggest names in the retail world. That, and the rarity of opportunities, has seen the high-end offering continue to creep outwards into Russell Street and Exhibition Street.
The opening of Town Hall station, reactivating the corner of Swanston Street, is set to bring more flowing pedestrian traffic to the strip.
Tenants: Breitling
tenants: Louis Vuitton, Cartier, Balenciaga
Retail vacancies came down for another year on the back of billion-dollar-plus tower builds, including Charter Hall’s completed 555 Collins Street and Hines’ under-construction 600 Collins Street pulling the core of the CBD further westward.
They follow the completion of projects such as Collins Arch and Olderfleet, and will add yet more office workers to daytime activity and underpin what is perhaps the most evenly-balanced tenancy mix in the CBD.
tenAnCy mOVEmENT
New Tenants: Bovet, Swatch, II Mercato, Bermont, Grand Seiko
Established tenants: IWC, MJ Bale, Freyja
Collins Arcade has just reopened following a $50 million overhaul, bringing Kathmandu, Saba, MJ Bale, 2XU, Priceline and Kingpin Bowling to a key section of the precinct.
The opening of Italian food hall Mercato in the McPherson’s Building has also refreshed the strip bringing locals and tourists into the district.
Elizabeth Street continues to be one of the biggest vacancy rate improvers in the CBD; its current rate of 5.26% comes just three years after it recorded over 22%.
The recovery has been driven by its northern end, which has become a 24/7 dining and entertainment precinct with a heavy pan-Asian influence, driven by residential projects, the universities and student accommodation towers generating activity at all hours.
New Tenants: Helly Hansen, Peter Jackson, Zambrero, Barhio Shoes
Established tenants: JB Hi-Fi, Coles, Woolworths
Japanese eatery, Mannaka Izakaya, artisanal gelato venue Mondo Gelateria, Korean chicken hotpot restaurant Dak Hanmari, Korean café Bottari, Chinese burger joint HanBaoBao, and modern Australian venue Bonnibel all added their flavours to the hospitality mix over the past year.
Bourke Street’s eastern stretch and its offshoot lane ways experienced tightening in vacancies for a third consecutive year, the result of an ongoing post-COVID transformation that has seen a bevy of new hospitality and entertainment operators move in.
An overflow from Chinatown, Exhibition Street, and Flinders Lane is making a notable impact. Headlining the additions is four-level French and Parisian dining experience by famed restaurateur Chris Lucas, and Andrew McConnell’s Trader House Group will open European grill Côte Basque in Crossley Street.
They join restaurant mainstays Pellegrini’s and The Spaghetti Tree in the precinct, as well as bars and venues such as The Carlton Club and the Imperial Hotel.
Meanwhile, the former Madame Brussels space has been transformed into a 1980s Tokyo disco-inspired restaurant and bar with an all-vinyl soundtrack. Activity along Bourke Street is supported by the trendy bars dotted through popular branching lane ways such as Meyers Place, Crossley Street and Liverpool Street, plus the musical crowds going to The Princess Theatre.
Over the longer-term, the precinct will receive a major boost from the redevelopment of a Little Collins Street car park by Sydney hospitality mogul Justin Hemmes potentially creating a landmark multi-level restaurant, café, bar and live music venue offering.
tenAnCy mOVEmENT
New Tenants: Maison Batard, Bossa Nova, Sot Dining, Disuko
Established tenants: Pellegrini’s, Grossi Florentino, The Imperial Annual Vacancy Variation
Flinders Lane’s east end is arguably the CBD’s most sought-after hospitality precinct. Well-credentialled, buzzing restaurants and bars such as Chin Chin, Supernormal, Nomad, Coda, Cumulus Inc., and Gimlet at Cavendish House – recently joined by sister venue, cocktail bar Apollo Inn just a few doors down along the Garden State Hotel attract enthusiastic diners throughout the day and well into the night. The latter venue attracted ASXlisted funds management giant Charter Hall, which has just bought its freehold for $35 million.
Spillover from the luxury set in the city’s Paris end has seen global giant LVMH planning a new multi-level Christian Dior
tenAnCy mOVEmENT
New Tenants: Pecks Road, Elios Melbourne, Loake Shoes, Amano Established tenants: Kisume, Coda, Brunetti Classico
flagship within its recently acquired 145-149 Flinders Lane building at the corner of Russell Street.
Closer to Elizabeth Street is an edgy fashion-dominated offering as well as Melbourne’s archetypal café-dominated lane ways Degraves Street and Centre Place, which attract visitors from across Melbourne, Australia and internationally.
Scott Alley and Cocker Alley have been recently reactivated as entrances to the newly-opened Town Hall Metro station and are creating a huge increase in foot traffic in the area.
Flagstaff Station
Southern Cross Station
Parliament Station
Flinders Street between Elizabeth and Russell streets span Melbourne icons Flinders Street Station and Federation Square, and has been revitalised overnight with the opening of the Town Hall Metro station entrance after years of construction works.
Flinders Street attracts pedestrian traffic at all hours, from visitors, workers and tourists coming to and from the city via Flinders Street station through both the Elizabeth Street and Swanston Street entrances, as well as at Federation Square and the multitude of tram lines running along and intersecting.
tenAnCy mOVEmENT
New Tenants: Guzman y Gomez
Established tenants: Daiso, Woolworths, Duke of Wellington
This stretch includes historic hotel Young and Jackson, and is bookended at its east by prominent entertainment venue The Forum, which regularly hosts national and international musicians and acts. Expanding Mexican chain Guzman y Gomez has opened in the busy food and beverage pocket close to Elizabeth Street.
The eastern edge of the CBD core and gateway to the “East end” has a high proportion of food and beverage operators, and has seen a regeneration in key pockets over the past year.
Japanese restaurant Miyazaki Gyu took over the former long-term home Izakaya Den space; the four-storey Hickens Hotel opened in the ex-Crafty Squire building following a $12 million renovation, and the rooftop space at boutique hotel Melbourne Place previously home to Mid-Air reopened as Cleo.
Momentum is gathering around the Chanel building from the overflow of the luxury set looking to get into the city’s Paris end; on the southeast corner of the intersection at Flinders Lane, LVMH is expected to set up a new multi-level Christian Dior flagship.
Russell Street begins from Federation Square and world-class entertainment venue The Forum in the south, and at its north borders QV Village and RMIT University before the street turns into Melbourne’s world-famous “Little Italy”, on Lygon Street.
New Tenants: Miyazaki Gyu, Lemon Head Hair, Marmelo, Sampheng
Established tenants: Lune, Culture Kings, China Bar
Traditionally home to numerous fashion boutiques, Little Collins Street has seen a growing food and beverage sector opening new ventures.
High-end menswear retailer Rodd & Gunn has ventured into hospitality, opening a four-storey flagship that includes restaurant and bar The Lodge, a wine cellar, and cocktail bars; Farmer’s Daughters Wine House has brought a new bar, bottle shop and dining room; while café Brief Brew and Bhutaneseinspired restaurant Apas Canteen opened their doors, since joined by Parisian diner Frenchie.
The $150 million Melbourne Walk opened between Little Collins Street and Bourke Street Mall, delivering 6,295sqm of retail, including a JD Sports flagship, and hotels Holiday Inn and Hotel Indigo.
A number of classic Melbourne lane ways home to a bevy of bars and cafés run off Little Collins Street – such as The Causeway, Russell Place and Meyers Place – and over the longer-term, the eastern end will be transformed by the redevelopment of a car park by Sydney hospitality mogul Justin Hemmes into a landmark multi-level restaurant, café, bar and live music venue offering.
tenAnCy mOVEmENT
New Tenants: Greenstreet, Hectors Deli, FOC, Longrain Canteen
Established tenants: Patagonia, Gormon, Nudie Jeans
Swanston Street has been a bellwether for the CBD’s fortunes in the last few years, pulling off a sensational rebound in trade and activity. Having borne the brunt of the absence of shoppers, diners, workers and tourists during the pandemic, vacancies have now been crunched to just 1.9%.
One of the Melbourne CBD’s main thoroughfares, Swanston Street runs through the heart of the city, northwards from the busy intersection with Flinders Street station and Federation Square, and passes Melbourne Central into the RMIT and Melbourne University precinct.
Swanston Street has been in the midst of a major overhaul for years, with vast tracts turned off for construction the two new Metro stations, and with their opening several construction sites have turned into hives of activity overnight. Retailers have been clambering in recent years to take space around the entrances of the newly-opened Town Hall and State Library Metro Tunnel stations, which have boosted pedestrian traffic day and night across the entirety of the strip. Meanwhile, McDonald’s opened its biggest Melbourne CBD store, sprawling over three levels in the former EB Games building,
tenAnCy mOVEmENT
New Tenants: Godiva, Hungry Jacks, Auspacific, Waffle Cake, El Jannah
Established tenants: Koko Black, Westpac, Chemist Warehouse
Melbourne’s Retail Core takes in major thoroughfares Swanston Street, Bourke Street Mall, Collins Street and Elizabeth Street, and includes Chinatown as well as major lane ways Crossley Street, Southern Cross Lane and Russell Place.
Reflecting the broader CBD market, vacancies came down again over the past year. After years of being in a transition phase, the Town Hall and State Library
Metro train stations have opened, turning major construction sites into hives of activity, while Bourke Street Mall has been revitalised by the opening of the Mecca flagship store and Rodd & Gunn’s retail and hospitality experience, as well as completion of Melbourne Walk, which has brought a new major retail component plus two International Hotel Group hotels.
tenAnCy mix
Melbourne’s famous Chinatown – home to the longest continuous Chinese settlement in the western world, has seen vacancies fall yet again over the past year, helped by a rebound of tourism inflow from China.
Together with the ongoing return of international students, and the throngs of visitors from across Melbourne, this is supporting the precinct’s famous hospitality offering that sees queues out the door at its dumpling houses and eateries.
New Tenants: Nora Thai, Reed House, Chillangos, Ab’s Barber, Crackle Bae Established tenants: Shanghai Street, Flower Drum, ShanDong Mama
The influence of international students continues to modernise the Chinatown offering, and has also effectively encouraged the expansion of the precinct further into the lane ways and further north up Swanston Street and around Lonsdale Street, towards the universities and student accommodation precinct.
New additions include sprawling restaurant Shunde Cuisine, while highly rated taco slingers Taqueria Sin Nombre are bringing a new flavour to the precinct.
Bourke Street Mall is experiencing a remarkable rebirth. The CBD’s key shopping strip has traditionally been dominated by major department stores Myer and David Jones, and in more recent years the H&M flagship store in the historic GPO building (designated as the true centre of Melbourne).
They have now been joined by newly completed offerings and developments that have brought a huge boost in daytime activity and weekend visitors. At the former David Jones menswear building, cosmetics giant Mecca has opened its three-storey, 4,000sqm flagship store to huge and enthusiastic crowds; high-end menswear retailer
New Tenants: Michael Hill, Bevilles, Mecca, Flying Tiger, Muji
Established tenants: Myer, David Jones, H&M
Rodd & Gunn opened a four-storey retail and hospitality flagship and 900 office staff from ad agency Clemenger Group have recently moved in. Meanwhile, the $150 million redevelopment of the Walk Arcade into Melbourne Walk has delivered two hotels with more than 450 rooms, and a new retail component anchored by JD Sports. Meanwhile, fashion and lifestyle retailer TK Maxx opened its largest Australian store, and looking to join the action, Japanese retailer Muji will be moving into the former Foy & Gibson building at the corner of Swanston Street.
For yet another year, Bourke Street Mall posted a tight vacancy rate of 4.0%, well below the CBD-wide average.
A wave of new restaurants, eateries and cafés along Exhibition Street has effectively connected several key hospitality precincts in the CBD.
Sprawling pub Morris House, which opened in recent years with distinct offerings on each of its four levels, together with Farmer’s Daughters, Antara, Bossley Bar & Restaurant and hatted Filipino restaurant Askal all connecting the Flinders Lane precinct through to Bourke Street, where South East Asian restaurant Juni and Turkish diner Anatolia Gozleme Kitchen SXL have opened, near Grossi
New Tenants: Askal, Subway, Tori’s, Bossley Bar & Restaurant, Juni
Florentino, Bottega Restaurant, Pellegrini’s, Fancy Hank’s, and Good Heavens Rooftop; and up to Little Bourke Street, around Longrain, Bodega Underground and Ho Chi Mama. Further north, towards the theatre district, modern flavours diner Papion Bites, Indonesian restaurant Ulam Rasa and Asian fusion eatery Steak and Soul opened their doors.
Exhibition Street is also home to several luxury retail brands retail brands including Rolex and Georg Jensen being over flow from the neighboring precincts.
Leasing activity on Queen Street in recent times has been dominated by new cafés and eateries, reflecting the broader CBD hospitality trend. Caterina’s Cucina E Bar reopened after a seven-month revamp and scored a second hat, and recent additions include popular French café and baguette spot French Fix, seafood-focused Japanese restaurant Sachi, new Mexican eatery Maiz y Cacao.
The openings in recent years of major office developments Queen & Collins and nearby 405 Bourke Street have boosted the daytime trade, and more office workers ordering coffees, lunches and after-work dinners will be added with the upcoming completion of Cbus Property’s $1 billion 435 Bourke Street tower.
New Tenants: Peddler, Bailey Espresso Bar, Sebastian Kakigori, Soaz 22, Maizy
Established tenants: Cacao, Mens Suit Warehouse, 7-Eleven, French Fix
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James Lockwood
DIVISION DIRECTOR - AGENCY
03 9275 7749
0402 824 441
lockwoodj@fitzroys.com.au
Franklin Gikas AGENCY EXECUTIVE - AGENCY
03 9275 7715
0459 180 999 gikasf@fitzroys.com.au
Ned Murray
AGENCY EXECUTIVE - AGENCY
03 9275 7797
0404 747 728
murrayn@fitzroys.com.au
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