Daiso Inks Flagship Deal

International homewares retailer, Daiso, has confirmed it will open its Australian flagship in Melbourne’s CBD later this year.

Ben Tremellen, Colliers International manager of retail leasing, and leasing agent Michael Di Carlo, of Savills, together with Tim Boyce, Daiso property executive and former Coles Group head of property, have facilitated a new lease under which Daiso will occupy 1800sqm site at Level 1, 2 Elizabeth Street.

The Japanese-based brand has signed a 10 year lease with the doors expected to open in late August.

Tremellen said while Daiso had several existing franchise outlets in Australia, this store, at the corner of Elizabeth and Flinders Streets, would become one of the first company owned and operated stores to be opened in Australia. Daiso opened its first company owned store at the Myer Centre in Brisbane on April 23 to strong customer traffic.

“Traditionally, retailers have had a strong preference for ground floor shop fronts, but as vacancy across the Melbourne CBD remains tight I believe we will see an increase in what we call vertical retailing, particularly with big box international retailers,” Tremellen said.

“At Colliers International, we are working with numerous landlords to activate multiple levels for retail use. This new Daiso store will be one of the largest Level 1 retail offerings in the Melbourne CBD when it opens later this year.

Colliers International introduced Daiso to leasing agents Savills after coming on board to help the popular Japanese retailer find a site for their Australian flagship.

Daiso’s Australian CEO, Kit Cheong – a former senior executive at the Coles Group and Pacific Brands – said the Daiso concept of providing everyday life solutions for one price of $2.80 was perfectly suited to the Australian retail market.

“With up to another dozen stores to open this calendar year along the east coast, the business is already well positioned to capitalise on some excellent locational opportunities that have emerged,” Cheong said.

Di Carlo declined to confirm the rent but said Daiso would pay more than $200/sqm over office rents, which represented exceptional value for building owner Fivex Commercial Property and an affordable retail rental for Daiso. He added the space was originally earmarked for offices but agents were able to work with both the owner and tenant to deliver a concept that allowed the area to be activated as a retail store, with access via escalators from Flinders Street.

He said the building’s location on the Elizabeth Street corner, opposite Flinders Street station – where passenger numbers were expected to double from 200,000 per day to 400,000 per day within 10 years – and the diverse mix of food retail, residential and education uses surrounding the building were key factors in Daiso’s decision making.