A different kind of property bubble lifts rents in city’s north

One bubble tea purveyor has leased a 50 square metre space currently occupied by Student Flights at 339 Swanston Street at a starting annual rent of $300,000 net, setting a new benchmark of $6000 per sq m rate for the university precinct.

Another entrant, Happy Lemon, has leased 24 sq m at 452 Elizabeth Street in Shop 1 for around $5417 per sq m through agency CBRE.

Fitzroys agent Alex Shum, who negotiated the five-year lease deal in Swanston Street with colleague Terence Yeh, said the new operator doesn’t want to be identified until they open in July after the property is handed over by the current tenant.

Mr Shum said several parties were prepared to pay $280,000 or more for the space, partly because the annual outgoings – costs paid by the tenant to maintain a property – were low, around $12,000.

“The rate achieved surprised a few other property owners,” he said.

Taiwan’s Jenjudan Milk Tea will open its first Australian store at 389 Bourke Street in a lease deal negotiated by CBRE’s Zelman Ainsworth, Tan Thach and Leon Ma.

Jenjudan will pay $243,000 for the 170 sq m shop, a rate just over $1400 per sq m.

The influx of Asian food and beverage chains has changed the motorised face of retailing in nearby Elizabeth Street, an area dominated by motorcycle dealerships for decades.

The 299 Elizabeth Street storefront of motorcycle parts retailer Modak has been leased to overseas bubble tea brand Prime’s Hai.

Landlord and Modak Motorcycles trader David Beanham will continue to run his business from the basement and upper floors after leasing 73 sq m of storefront at $3150 per sq m to the Shanghai-based operator, Mr Shum said.

Another 200 sq m, double-fronted building at 423-425 Elizabeth Street abandoned last year by Spot On Motorcycles has been leased to a Hong Kong dessert house chain Hui Lau Shan.

The group paid a premium $400,000 annual rent.

Mr Shum said operators often paired their bubble tea outlet with a neighbouring restaurant.

Gong Cha’s tea shops are matched with fried chicken outlet Hot Star, while bubble tea store Gotcha at the river end of Elizabeth street is next door to a Da Long Yi Hotpot run by the same operator.

Property Editor at The Age and BusinessDay journalist for Fairfax’s theage.com.au, smh.com.au, watoday.com.au and brisbanetimes.com.au.

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