Celebrity chef Michael Lambie had been looking for a venue to open a new style of restaurant for a year and a half before he chanced on the perfect site at the perfect time – a renewed blaze of confidence in the Melbourne CBD. “It just felt that the time was finally right,” said Lambie, the luminary behind Melbourne icons Stokehouse, Circa the Prince, Taxi Dining Room, Lucy Liu and The Smith.

“To open up in Melbourne right after COVID would have been suicidal and I wanted to allow some time for the economy to recover. “But it now feels that Melbourne is bouncing back, with a lot of new businesses opening. I’m in the city most days and the really good places are really busy, so the money is definitely there. You just have to be good enough to persuade people to spend.” Lambie’s new contemporary Asian concept restaurant Juni, a joint venture with the Red Rock Leisure Group, is set now to open in late 2024 after he signed a 10-year deal for the 488-square-metre space at 136 Exhibition Street for $400,000 a year. For James Lockwood, Fitzroys division director – agency, who did the deal, it’s a sign of the continuing upturn in retail in the Melbourne CBD, driven by the strength of the hospitality, food and beverage and entertainment sectors.

“We’ve seen the city coming back with real enthusiasm and positivity,” Lockwood said. “Michael Lambie’s deal, taking over the old Officeworks site, is one of many new enterprises starting. “We’re seeing some really good news out there in the market. Everyone now knows that we’ve hit the top of interest rate increases, and there’s potential for decreases. So some shops that we haven’t been able to lease for two to three years are suddenly all leased, with operators coming in and feeling confident.”

Fitzroys’ latest Walk the CBD report has found retail vacancies in the CBD now sit at 8.7 per cent across the key retail precincts – down from 15.5 per cent a year earlier and 33 per cent three years ago.

Hospitality, food and beverage and entertainment are the biggest movers, rising from occupying 34.1 per cent of the tenancies to 40.9 per cent, with service retail lifting modestly to 16.7 per cent.

CBD foot traffic levels in the first two months of this year were the highest since 2015, according to the latest Melbourne City Council pedestrian data. Saturday is now the busiest day of the week, followed by Friday.

The return of international students has given the CBD a real boost, while some retail rents have started to come down to encourage new tenants. “Office occupancy in Melbourne is still lagging behind, but the retail precincts are performing well, particularly at night,” Lockwood said. “There’s some really good news out there.

“At the pizzeria, bar and restaurant Max on Hardware, for instance, co-owner Michael Ibrahim says he’s seen turnover lift to over pre-pandemic levels.” Another CBD headline deal was the lease of 758 square metres at 360 Bourke Street for the interactive Unko Museum – nicknamed the “cute poop museum” – at $370,000 a year, and regional manager Phil Mallet of operator Fever ANZ says it’s proving a huge success.

“We found this site while we were looking for a Sydney site and it was much more affordable,” Mallet said. “So we ended up setting up in Melbourne first, and it’s been great. There’s so much foot traffic and interest, so the space is going very well.

“We’re on one of the busiest corners of the city and we’re very excited about it. During the school holidays, we’ve often been sold out as we’re so popular with the family demographic and I think that area is even busier than it was pre-COVID.” Meanwhile, the Queens & Collins building is seeing the opening of Remo Nicolini’s A25 Pizzeria and a new French-Japanese fusion restaurant by Vivienne and Ron, the team behind Franklin Street’s Ichigo.

Other new hospitality leases include Dumpling Kingdom at 121 Exhibition Street, Chilangos and Buddabah at 50 Lonsdale Street, and Filipino and South-East Asian-inspired Askal at 167 Exhibition Street.

Swanston Street, the Fitzroys report shows, was the biggest improver in terms of vacancies, and tenants are taking up space around the future Metro Tunnel station entrances, anticipating key pockets of the city reawakening in 2025 on completion of the long-term construction efforts.

The “Paris” end of Collins Street retained the lowest vacancy rate. But Lambie, a previous winner of three Chef Hats and a restaurant of the year award for Taxi Dining Room, is quietly confident about his new venture in the heart of the city.

“James negotiated a great deal for me and we’re just waiting for the permits now to start building,” he said. “But we have so much happening around us too – Morris House, Farmer’s Daughters, Antara 128, Chin Chin … everything.

“That whole area is hopefully going to be a great new dining hub in the CBD that will work really well.”