Zara bolsters Bourke Street Mall

The Spanish company, which has annual revenue of ?6.8 billion and more than 70 stores around the world, has a signed a new lease over the entire building, excluding the basement. It will have a 19-metre frontage to the mall.

Zara has taken a new lease over the ground, level 1, level 2, level 3 and level 4, with the rent believed to be worth more than $3 million per annum.

Supre leased the space in 2007, but appointed CBRichard Ellis as exclusive agents to market the property, either as a sub-lease or to assign the existing lease.

The current Supre lease expires on April 30, 2016.

Max Cookes, CBRE's senior retail services negotiator, negotiated the deal, but declined to comment when contacted by BusinessDay.

The Bourke Street Mall, along with Westfield's new Sydney shopping centre, will be the site of Zara's first stores in Australia. Zara has also been linked to Chadstone shopping centre.

Zara's presence will solidify the Bourke Street Mall's status as a powerhouse retail strip, and provide big competition to existing players.

David Jones and Myer are the two main department stores in the mall.

Next to Myer is Colonial first State's new retail development project that will span from the mall to Lonsdale Street. Melbourne's former GPO, on the corner of Bourke and Elizabeth Streets, also sells quality fashion, luxury goods and dining.

Other nearby flagship stores include adidas, Sportsgirl, General Plant, Jetty Surf and The Body Shop.

Zara, which sells men, women's and children's fashion, has taken the world's fashion market by storm since opening its first outlet in 1975. It is the flagship chain store of Inditex Group owned by Spanish company tycoon Amancio Ortega, who also owns brands such as Massimo Dutti, Pull and Bear, Oysho, Uterque, Stradivarius and Bershka.

The group is headquartered in A Coru?a, Galicia, Spain. It is claimed that Zara needs just two weeks to develop a new product and get it to stores, compared with a six-month industry average, and launches around 10,000 new designs each year.

Zara has resisted the industry-wide trend towards transferring fast fashion production to low-cost countries. It has a policy of zero advertising, preferring to invest a percentage of revenues in opening new stores instead.