Landlords are considering how to reinvent King Street amid the precinct’s ongoing transition.
Gucci's impending move to Raine Square marks a key milestone for Perth’s King Street.
Located to the west of the CBD, King Street was once a favoured location for high-end brands.
However, Charter Hall has gradually lured a raft of luxury operators to Raine Square, including Louis Vuitton, Tiffany & Co and Kailis Jewellery.
Gucci, which is putting the finishing touches on its Raine Square store with plans to open this month (September), is the last major luxury fashion brand to relocate from King Street.
Multiple deals have been done for new tenants to come into the street, which is largely owned by private investors, including the Bontempo family, but several shopfronts remain vacant.
City of Perth Lord Mayor Basil Zempilas believes the precinct could take a number of forms.
“Some of what we are seeing in parts of King Street already is not global luxury brands, but brands that are youth high end, so to speak,” Mr Zempilas said at recently opened premium jeweller Sarah & Sebastian at 67 King Street.
“When we think of luxury strips around the world … for the streets just off them is what we call new luxury. The slightly younger, alternative labels; that’s what we’re seeing the emergence of in King Street.”
Alfresco dining is the lord mayor’s preference, however, and a priority he shares with property owner Jim Litis.
“I’ve spoken to a lot of the ratepayers and owners in King Street about the prospect of closing off the street and making it a full alfresco dining experience,” Mr Zempilas said.
“It’s not absolutely vital that King Street between Hay and Murray streets open to traffic all the time.”
Mr Litis, who partly owns 67 King Street where Sarah & Sebastian has just moved, also has ownership stakes in several Murray Street retail properties.
Adrian Fini and Primewest founders Mr Litis, David Schwartz and John Bond, bought 67 King Street from Lorrel Ann Apthorp for $4.2 million in 2019.
The Primewest trio, who now operate under the banner PrimePrivate, also own 307 Murray Street, where luxury French jeweller Cartier opened its first Perth store last week (August 26).
Italian luxury fashion brand Fendi was also set to move into the store next to Cartier, but pulled out of that deal for economic reasons.
Cartier’s Perth store opened in late August. Photo: Michael O’Brien
Industry sources say European fashion house Balenciaga and Prada are among the brands eyeing the space previously intended for Fendi.
Mr Litis told Business News the move by Gucci marked the end of an era for King Street.
“I think King Street is going to have to change. I don’t think they’re ever going to get top-end luxury brands [again], I just can’t see it,” he said.
“I always said it should be a food precinct, that was my view always. At night time, you close the street off and they put the tables and chairs out.
“They do that in Hardware Lane in Melbourne. They’ve all got their businesses inside and then in the evenings they bring out their tables and chairs and people sit out there.
“The whole street could be food and beverage, but you’ve got to be a landlord who wants to do that.
“That’s what I can see as the best outcome for that street [King], because I’ve thought about it a lot.”
Mr Litis said he was not drawn to property in King Street, with the exception of the Sarah & Sebastian building.
“I’m sort of glad we bought [67 King Street], but … I wouldn’t be disappointed if I had have missed out, put it that way,” he said.
Mr Litis’s penchant for reviving heritage buildings and affinity for retail are clear, given the CBD properties in which he has an ownership stake.
One of these buildings is the Commonwealth Bank building in Forrest Chase. Apple is moving there from Hay Street and Pandora is leasing a space.
“I just think that these [heritage] buildings are special,” Mr Litis said.
“Of course everything wears out and needs repairs, and most people will run away because it’s too expensive to repair. I think there’s value in repairing it.
“The truth is … a lot of people love working in these spaces, [so] when we do them up we never have trouble leasing them.”
A recent study by CBRE into the nation’s luxury retail market highlighted the undersupply of luxury outlets in Perth.
It found Western Australia had 10.1 per cent of the national population but just 5.8 per cent of luxury stores.
However, the report found Perth remained an attractive opportunity in terms of high-end luxury retail, with several key moves in recent years.
These include Chanel, and Van Cleef & Arpels, which opened stores at 300 and 352 Murray Street, respectively, in the past year.
Van Cleef is on the corner of King Street, marking a point of difference from the concentration of luxury fashion retailers at Raine Square.
Meanwhile, Christian Dior will open its first Perth store, in Wesley Quarter, early next year.
“In recent times, prestigious brands have flocked to the City of Perth,” the report stated.
“The city’s growing population of high-net-worth individuals, driven by industries such as mining, has created a lucrative market for luxury goods and services.
“The city’s attractiveness to luxury retailers is evidenced by the major makeover of Perth’s high-end shopping strip on Murray Street, with many luxury brands either relocating or opening new stores in the new precinct.”
Louis Vuitton’s move from King to Murray Street was considered a catalyst for other retailers to relocate. Photo: Michael O’Brien
Lease Equity managing director Jim Tsagalis, who led the deal for Christian Dior, said Louis Vuitton’s move from King Street to Raine Square in 2019 had prompted others to follow.
“Louis Vuitton, their move was catalytic in many ways,” Mr Tsagalis told Business News.
“Typically in luxury precincts, if Louis Vuitton are in, it sets the precinct.
“[Louis Vuitton] has the highest turnover of all the brands.”
Mr Tsagalis added that Louis Vuitton’s move to Raine Square had enabled it to broaden its product range in Perth.
“Previously, it was really handbags and some accessories,” he said.
“Now they’ve got a whole fashion [range] and footwear.”
Mr Tsagalis, who has helped lure a number of luxury brands to Perth, said King Street should be considered a series of precincts.
“You’ve got St Georges through to Hay, then you’ve got Hay through to Murray, and then you’ve got Murray through to Wellington,” he said.
Mr Tsagalis said the area between Murray and Wellington streets was well tenanted, with jewellery shops including Linneys occupying the space.
“Vacancy in that area is probably not as relevant as … that middle part [of King Street] where all the luxury was,” he said.
“My expectation is that we’ll see a wave of brands that [fit] the size of the tenancies, so groups that don’t need a big box.
“The Fendi site is just too big, so it’s not going to suit a whole lot of brands. But the King Street stuff that’s left, I think will suit a number of them.”
Agencia Property managing director Peter Zissiadis operates his business on King Street, near St Georges Terrace.
He has done a number of deals along the strip, and says it takes a long time to secure the right tenant.
Recently, Agencia leased the property on the corner of King and Hay streets to international garment manufacturer AS Colour.
The property had been occupied by Prada until 2020.
Additionally, Mr Zissiadis is negotiating with a number of tenants to move into the existing Gucci store at 36 King Street.
The luxury fashion store’s lease expires in July next year, but if a tenant moves in before then Gucci can break its lease early.
The real estate group has also cemented several deals along Hay Street, with Chemist Warehouse set to move into the old Priceline Pharmacy location and a gym evaluating a move into the Harpers Building basement.
Mr Zissiadis told Business News he felt positive about the long-term prospects of King Street, which could eventually be seen as an overflow location for Murray Street.
“If the international retailers run out of room on Murray Street, they could come back around the corner to King Street,” he said.
