The past year has been one of the most active in retail leasing, with Sydney's central business district dominated by the influx of international "fast fashion" and mainstream retailers, all of which have found space in the super prime Pitt Street Mall precinct.
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These include Uniqlo MidCity, Sephora Westfield Sydney, Forever 21 Sydney Arcade, which opens in April 2015, H&M and Zara Home Glasshouse, which open in mid/late 2015.
These international retailers have taken the lion's share in Pitt Street Mall and forced new entrants to other streets.
Alex Alamsyah, Knight Frank's senior director of retail leasing, said despite the hype of "fast fashion in 2014", 2015 will be the year of luxury retailers.
He declined to comment, but it is understood that Louis Vuitton is doing about $80 million p.a. in sales from their George Street flagship store. Hermes is also looking for a bigger flagship store to replace their Elizabeth Street store as they are doing very well right now; and Chanel is believed to doing about $20 million p.a. inside Westfield Sydney.
Mr Alamsyah said if the King of Luxury is Louis Vuitton, then the Queen is Hermes and the Princess is Chanel.
However, the "King of Jewellers" is also coming to town with a 1000-square-metre flagship store over three levels in Castlereagh Street, Sydney, which will open in 2015.
Mr Alamsyah declined to comment further but it is understood that king of jewellers (Jewellers to Kings as quoted by King Edward VII of England) is the undisputed Cartier, owned by Richemont (number 2 in the world of Luxury Group below the LVMH Group and above the Kering Gucci Group.
It is understood that Cartier will move out from the MLC Centre, which will be redeveloped; and nearby 74 Castlereagh Street (which was leased by Mr Alamsyah) has obtained City of Sydney Council approval to proceed with the retail redevelopment over three levels and a brand new facade for luxury retail.
Mr Alamsyah said the move is because there is no more available stock on the Mall except the 85-square-metre Politix site at MidCity, with a lease expiry date in March 2015.
"It's all about demand versus supply; there has been, and always will be lots of demand but no supply, which means rents on Pitt Street Mall will climb higher and higher; the sky really is the limit!"
Mr Alamsyah said Pitt Street Mall was the undisputed most successful and strongest performing retail precinct in Sydney and Australia. That was borne out when it was named as the sixth most-expensive strip in the world, in the Cushman & Wakefield Streets of the World survey.
It is understood that Hype DC and Tag Heuer are paying about $1.5 million per annum and $1.4 million p.a. respectively for about 100 square metres.
"Therefore secondary players like MUJI from Japan have no choice but to proceed with Level one in the Galleries at 2 Park Street, replacing the ex-Freedom Furniture space and will open in 2015,' Mr Alamsyah said.
"Furthermore local retailers, Just Group and Sussans Group, may have to move out from Sydney Arcade and Glasshouse Pitt Street Mall for the forthcoming Forever 21, H&M and Zara Home respectively.''
"On the other hand, Koko Black chocolate salon from Melbourne is taking over the Bon-Bon fine chocolate cafe at The Strand Arcade Pitt Street Mall and will open in February/ March 2015.''
Mr Alamsyah said the coming year would be coloured by luxury retailers such as Franck Muller, IWC, Van Cleef & Arpels, Piaget, Panerai, Graff, Harry Winston, Saint Laurent, Alexander McQueen, Valentino, BCBG Max Azria, Dolce & Gabbana, to name a few.
Plus, semi-luxury brands such as COS by H&M, Massimo Dutti by Zara, Banana Republic by GAP, Agents Provocateur, among others, will also arrive.
"Luxury food and beverage and lifestyle like EATALY, Dean & Deluca, LEGOLAND and department stores like Marks & Spencer, Debenhams, Harvey Nichols, among others are also coming," Mr Alamsyah said.
