High-quality food and beverage tenants are continuing to lease space in Sydney’s CBD as the sector goes from strength to strength in the post COVID environment.
Knight Frank’s Associate Director Retail Leasing Adam Tyler said the high-calibre restaurant groups in Sydney had been best placed to hit the ground running following lockdowns, and had capitalised on better commercial deals for space over the past 12-18 months.
But he said at the same time they were also experiencing greater certainty on income as a result of post-COVID conditions.
“Top-tier restauranteurs had staff ready to go following lockdowns and as a result they were able to hit the go button faster and take advantage of higher vacancy rates and with it, better Tenant incentives,” he said.
“Not only are food and beverage businesses benefiting from potentially better commercial deals, since COVID some operators have also had better income levels.
“They have been able to have greater certainty over income and how many covers they will have every sitting as pre-paying with a credit card to secure a booking has become the norm.
“Fixed sittings are also now the standard for top-tier restaurants, and with greater certainty restauranteurs are able to flip their tables several times per night with a guaranteed income.
“On top of this, spend per head was up, with many food and beverage tenants reporting they have better turnover since COVID.
“Many operators have been so successful they are expanding their venues, leasing more space to open more eateries.”
On the back of the wider trends in the retail leasing market for food and beverage tenants, Tyler has negotiated several leasing deals, including:
- 4-6 Bligh Street – Liquid & Larder has leased a 369.9sq m space from landlord Holdmark. The venue will be the group’s fifth venue in Sydney, and is set to open in the second half of this year.
- 171 Clarence Street – The Bentley Group has leased a 276sq m space from landlord Terraform Capital. This will be the group’s fifth venue in Sydney.
- 9 Castlereagh Street, Sydney – The Grounds of Alexandria has leased 250sq m from landlord Charter Hall. This will be the group’s fifth venue.
- 92 Pitt Street – Swillhouse Group has leased a 452sq m space from City Freeholds. The venue will be the group’s seventh in Sydney.
- 89 York Street – Pinky Ji has leased a 300sq m space from Fife Capital, with the restaurant recently opening. This is the second Sydney restaurant for Jessi Singh, who has already opened restaurants in Melbourne, Adelaide and Byron Bay.
- 66 King Street – The Charles by Etymon Group has leased 1,045sq m from a private landlord, which is one of four venues for the group.
Leasing rates for the deals range between $800 and $1,500 per square metre, with incentives 20 to 30 per cent of the rent.
Tyler said many of these restauranteurs were very successful in Sydney, with some of the venues taking bookings months in advance.
He said there were some big-name food and beverage operators operating in Sydney and it was expected more would follow suit.
“I’m fielding enquiry from more restauranteurs looking to either expand on their portfolio here or enter the Sydney market for the first time.
“The western corridor of the CBD – that is, York, Clarence and Kent Street, also known as the YCK precinct – has become the go-to food and beverage precinct for Sydney’s best small bars and restaurants.”