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Strong occupancy levels keep Military Road vibrant

THE MILITARY ROAD precinct is a busy retail hub which spans 3km* from The Oaks Hotel in Neutral Bay to The Buena Hotel in Mosman.

Strong occupancy and an excellent mix of food, fashion, services and restaurants keeps vibrancy high across all three suburbs, according to Ray White’s latest Between the Lines* commercial research.

“We’ve seen an increase towards service-related retailers to combat declines in spending in more traditional retailers,” said Ray White Commercial NSW – Sydney North Director Scott Stephens.

“The Mosman precinct continues to be a mecca for leading Australian fashion designers and homewares, while specialty food and cafés and restaurants continue to cater for the local demographic and visitors who want to take in everything the Lower North Shore has to offer,” Mr Stephens said.

“Fashion retailers including Bec & Bridge, Mode Sportif, Viktoria & Woods, Cable & Tommy Hilfiger, to name a few, opened stores on Military Road in the past 12 months. 

“The opening of rear access shops and activation of laneways has brought greater interest into these locations, often increasing the income on offer for underutilised space.

“Rents have seen some growth in recent years, albeit have remained steady recently, with high demand for both food and service providers.

“Limited stock available to the market for sale highlights the attraction to own in this location, those assets which do come to market are hotly contested by the local private investor market, attracting yields in the sub-five per cent range.

Mr Stephens said in calendar year 2019 they had leased over 100 premises on the Lower North Shore, and the demand remained high.

“The strength of Military Road is buoyed by the mix of retailers, the other local attractions including Taronga Zoo and Balmoral Beach, the highest socio-demographic environment in Australia, and the fact that there’s no major shopping centre in the catchment,” he said.

“All of these factors contribute to what is arguably the best and one of the last major high streets left in Sydney.  

“We’ve had a number of deals recently that’s highlighted the popularity of the strip. Amcal Chemist has recently opened in 783 Military Road, Mosman after signing a five-year lease term with two five-year options at $1,500 per sq. metre p.a. plus GST.

“BeFit Training have signed a five-year, five-year option lease at 155 Military Road, Neutral Bay and that will produce $360,000 p.a. plus GST. We also managed a deal that sees a Sarah and Sebastian jewellery store take the reins at Shop 1, 1-5 Mandolong Road for $115,000 p.a. plus GST.”

Ray White Head of Research Vanessa Rader said Ray White Commercial had completed a survey of the Military Road (and surrounds) precincts from Neutral Bay through to Mosman to understand the occupancy and retail mix of the region.

“We surveyed the Military Road precinct which extends through Neutral Bay, Cremorne and Mosman, with the survey including 660 shop fronts with a total 78,265sq m* and the total vacancy represented by 7.75 per cent,” Ms Rader said.

“The largest of the strips which were surveyed was the Neutral Bay precinct, home to 250 shops, which represent a total area of 33,607sq m*.

“The Neutral Bay precinct predominately covers Military Road street-facing retail including rear shops.

“It also extends down Ben Boyd Road to include Grosvenor Street and Lane, in addition to Young Street and Waters Road on the southern side of Military Road, and it includes retail properties on Wycombe and Rangers Road.

“This location is home to two Woolworths supermarkets which makes up 22.58 per cent of the total stock along this precinct, vacancy is at its highest across all three suburbs, representing 9.19 per cent.”

Ms Rader said the survey resumed at Winnie Street and included the tenancies along Parraween Street through to Macpherson Street, on the southern side of Military Road the tenancies on Glover and Spofforth Streets were included, as well as Cabramatta and Spencer Roads and Holt Avenue.

“The retail centre including the SupaIGA wasn’t included, it was only those tenancies that were street-fronting. This region represented just 13,080sq m* of retail space with 6.73 per cent vacancy,” she said.

“Mosman has had a long association with designer brands, particularly in the clothing and homeware sectors.

“This precinct commences at Cardinal Street on Military Road and extends through to Spit Road at Ourimbah Road, however continues down Military Road onto Middle Head Road retailers and those on Prince Albert Street.

“It also includes shop fronts along Raglan, Vista Streets, Avenue Road and the plaza area immediate to Mosman Council, including laneways and rear access Military Road properties.

“This large survey included 310 shops and 31,578sq m* with just 6.64 per cent recorded vacant, the best of the three suburbs surveyed. Mosman assets attract a premium, with rents ranging between $1,200 and $2,000psqm gross, depending on size and location.

“Rents in Spit Junction tend to be as much as 50 per cent lower compared to those on Military Road in Mosman Junction.”

*Approximately.

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