Chanel lands trophy store in $75m luxury deal

Chanel, the renowned French luxury fashion brand, has recently made headlines with its significant investment in Melbourne's Central Business District (CBD) by purchasing its 10-year-old boutique located at the corner of Russell Street and Flinders Lane for an impressive sum of AUD 75 million (approximately USD 53 million or EUR 46 million). This transaction underscores Chanel's commitment to the Australian market and Melbourne's growing reputation as a global destination for luxury shopping.

The boutique, which was previously leased, was first opened in 2011 and spans over three levels with a total area of approximately 800 square meters (8,611 square feet). The building, designed by architect John Wardle Architects, is an iconic structure that features a glass facade and is considered an architectural landmark in the city.

The sale represents one of the largest real estate transactions for a single retail property in Melbourne's history. It is also a testament to the city's growing appeal for international luxury brands, as well as its economic stability and population growth.

Melbourne's CBD is undergoing significant transformation with numerous high-end developments and redevelopments, attracting both local and international investors and retailers. The area is home to numerous luxury brands such as Gucci, Prada, Louis Vuitton, and Hermès, among others.

Chanel's decision to purchase the boutique is expected to boost the local economy and create jobs, as well as provide an enhanced shopping experience for customers with potential renovations and improvements to the store.

The transaction was facilitated by CBRE's Retail Investment team, who acted on behalf of the vendor, while JLL's Retail Leasing team represented Chanel in the negotiations.

This investment further solidifies Chanel's presence in Australia, where it already operates several other stores in Sydney and Perth. The brand's commitment to the market is evident through its continued expansion and investment in its Australian operations.

The sale comes at an opportune time as Melbourne's luxury market is experiencing strong growth, with international tourists and local consumers driving demand for high-end goods. According to a report by Bain & Company, the global luxury market is expected to grow by 4% to 6% annually over the next five years, with Asia Pacific being the fastest-growing region.

Chanel's investment in its Melbourne boutique is a strategic move that reflects the brand's long-term vision and commitment to the Australian market and the growing importance of Melbourne as a global destination for luxury shopping.