By Rhonda Dredge
Shops are renting out swiftly in the west wing of Royal Arcade thanks to “brave” businesses and a personal touch introduced by one of the arcade’s landlords, Ilias Megas.
Just one of the four shops Mr Megas’s family owns in this tiny annexe was tenanted at the end of the city’s major lockdown in October.
Retail was at a standstill and there was little hope of a rush of businesses seeking CBD opportunities.
Even though one shop was rented out in November, the others were a sad reminder of what has happened to CBD retail with too many empty properties on agents’ books.
Last month Mr Megas took things into his own hands and put up signs in this quiet little beauty spot, so that those who went past to get their shoes repaired, nails done or to pick up a recycled frock, knew what rents he was asking.
The signs went up in the windows of number 43 and 46 declaring the pop-up rent to be $800 a week and calling for interested parties to contact him on his mobile.
Now there are two new jewellers, Sky Gem and Curiosity Merchant, and a small clothing importer is about to move into number 43 which had been empty for 18 months. This deal was clinched in June.
Tenants say the personal touch has worked well to allay fears that they’d be forced into long leases or required to pay bonds of up to six months.
Zora Bell Boyd moved into Shop 45 last November and opened Curiosity Merchants with her locally made jewellery. She took a six-month lease on pop-up rates.
The New Zealand jeweller painted the walls black and can’t stop admiring the copper frames on the period windows nor the black spiral staircase that lead to a storage room above the shops.
“I asked the landlord if people back in the 1920s lived here with boutique businesses but he said ‘no’. The annexes are so great. This was built after the main arcade. We don’t have a lot like this in New Zealand,” she said.
Zora has nothing but praise for Ilias. She said he grew up in the annexe. His father Tom owned the shops and he ran around in the arcade as a kid, she said.
“He knows lots about the history of the arcade. He’s very personable. He’s a good person.”
Zora is a happy tenant compared to others in the annexe who claim their landlords have even put up the rent during the pandemic. Even so, there is a community spirit with Kit Espresso at the centre.
Further down, Evans Shoe Repairs, trading since 1956, had a queue after the long weekend. There’s also a small pastry shop in slotted into what used to be a stairwell.
“It used to be a dead space under the stairs,” Ilias told CBD News. “I can’t stand up there. I have to bend down. I would hit my head. I had to rent it to petite girls.”
He said he made the decision to deal directly with businesses themselves so they could have short-term leases and test out ideas.
“It’s something different,” he said. “I looked at the main arcade and what other landlords were doing and the shops are still sitting empty.”
He does not want to blame agents but there is evidence that the personal touch is catching on.
Shops available for rent in the main arcade include those formerly occupied by Roxanne, Hoot, Chocomamma, Tivoli, Habbot, Jasper Junior and the old Bank West shop.
But there’s now a sign on the door of Shop 20 from the landlord. “As the owner of this shop I am prepared to offer significant incentives,” the note said. It was signed by Joe and a mobile number was given.
“Let’s not kick the poor agents while they are down,” Ilias said. “It’s been a rough few years for the leasing agents who predominantly rely on commissions as part of their salary.”
“I think it is more of a case of being able to be more flexible and creative to get a deal done.”
“I think the agents are sometimes in a rough position of dealing with unrealistic rentals for a pre-pandemic market and the fact that they need to secure a longer three- or five-year lease to justify their commission, which in this environment is tough for a lot of small business owners to commit to.”
Ilias was complimentary about those who had taken a risk in an uncertain period. He thought his tenants were “very bold and brave to start new businesses in the face of a pretty quiet CBD retail market.”
He said he was not complaining about the rent reductions. The shops used to command up to $55,000 per annum. “We had 20 to 30 years of good times,” he said •