In Williamstown, about 10 kilometres south-west of Melbourne's city centre, Lisa Malkin Hill helps run a family clothing shop that traded on Douglas Parade for 27 years.

Last year, she said they had no choice but to relocate about 200 metres around the corner because they could no longer afford the rent.

She said they found it very difficult to negotiate with their landlord when the pandemic hit.

"We needed their assistance," she said.

"Given that we'd been such a good tenant for such a long time, would they please work with us so that we could both survive?" 

After months of negotiating, the business was eventually able to reach a confidential rent relief agreement with the landlord.

The landlord said COVID had affected him severely too.

Some suburban rents are like city prices

When Ms Malkin Hill's lease ended, they left the property in search of a more reasonable rent.

"The rents are high in Williamstown. They've gone up a lot," she said.

Local traders and real estate agents said some of the rents in Williamstown on Douglas parade were like "city prices".

That means up to $80,000 to $100,000 a year.

"There's a lot of pressure on retail anyway. It just wasn't sustainable," Ms Malkin Hill said.

Nearly a year later, their old shop remains vacant. It's not the only one in Williamstown, and it's a story that is being replicated across Melbourne, in high streets and in the city centre.

Landlord Joe Barbone, owner of Shop 22 in Melbourne's Royal Arcade, can't get his head around it.

"Keeping rents high I don't understand the logic of, because the market is not the same," he said.

His shop in Royal Arcade has been empty since just before the pandemic, when his tenant moved on.

For more than two years, he's had a sign in the window offering big discounts to attract a new tenant.

"I think the rent we are quoting goes back to the rent level back in 2011, or 2010," he said.

He said the rent of a premium single shopfront with a first floor in the Royal Arcade would have reached around $9,500 per month ($114,000 annually) at the end of 2019.

He reckons it is now worth closer to $7,000 a month ($84,000 per year).

But it's only now it's looking like he has found a tenant.

Outer suburban areas spared some of the pain

In some growth suburbs like St Albans, 17 kilometres north-west of the city's CBD, the main street is as busy as ever.

My Trinh used to own two businesses in the city but sold them just before COVID-19 hit.

She said she was grateful to be out in the suburbs.

"It's really tough to do the business there, and the rent is really high. I feel more comfortable trading in local suburbs," she said.

She said the rent was still high in St Albans' busy Alfrieda Street, but there were always plenty of people around to make it worthwhile.

"We never have any vacant shops around here because always someone is willing to come in and try it," she said.

Three commercial Alfrieda Street properties recently sold for $2.3-$2.5 million dollars, including one that went a million dollars over the reserve price.

The annual rents at those properties are between $55,000 and $70,000.

Director of Fitzroy's real estate agency, David Bourke, said the competitive sales reflected the thriving area and continued strong demand from investors for commercial properties even with market changes caused by the pandemic.

Business advocates call for tenancies ombudsman

Back in the CBD, there are some signs that things are getting better.

In June, City of Melbourne data showed weekend foot traffic in the CBD was up 106 per cent on 2019 levels.

During the week, it's still only 77 per cent of what it was before COVID-19.

During the pandemic, state and federal governments brought in special rules to protect tenants — they couldn't be evicted, and landlords had to negotiate on things like deferring rent.

Now the regulations have ended and it's time to pay it back.

Head of the Franchise Council Mary Aldred represents the interests of thousands of small business owners and is calling for more rules to help business tenants negotiate through this period.

"I've heard examples of up to $100,000 on small business tenants that needs to be paid, you know, within a fortnight, or they're going to change the lock," she said.

She wants a federal ombudsman to oversee these kinds of disputes.

"Most landlords try and do the right thing. but we need a modern approach and a better regulation for behaviour of those landlords that don't try and do the right thing," she said.

Victoria's Small Business Minister, Jaala Pulford, said business owners and landlords should try to resolve issues between themselves.

"We encourage commercial tenants and landlords to work together and negotiate issues in good faith where possible," she said.

"The Victorian Small Business Commission provides free information and advice for tenants and landlords and can provide low-cost dispute resolution services.

"The government continues to provide small businesses with advice, mentoring, mental health and wellbeing services and financial counselling."

Increases in 'pop-up' tenants to try and fill empty shops

In the formerly busy strip of Fitzroy Street in St Kilda, which was struggling with vacancies even before the pandemic, a group is trying to create new spaces for young creatives instead of letting shops sit empty.

Not-for-profit organisation Renew Australia has been working in the area for two years, placing young businesses and creatives into empty shops for low or no rent.

They say their model works because it recognises that many landlords can't or won't reduce the rent because it can affect the value of their property.

That is because commercial properties are valued by taking into account the asking rent.

It means if someone isn't relying on the tenant's rental payments to cover costs like mortgage payments or rates, they may choose to leave the space vacant to maintain the value of their property based on a higher rent, rather than reducing rent, which could shrink its value.

"It's easier to give your property away for free or on a sub-licence than to reduce the rent," CEO of Renew Australia, Angela Simons, said.

Landlord George Vasiladis has lent space in his empty shop for 9 months and said he was happy to give a young business a leg up.

"The rent was approximately $80 a week, for them to get going, which really doesn't cover costs," he said.

"What's the alternative, I can have a vacant shop or I can have someone in there, and at least I know I've made a difference to them."

He said it didn't make him any money but allowed prospective tenants to see what the space would look like occupied. 

He has now found a new commercial tenant for that space.

"It's not a long-term solution, but at least gets us through this period of the unknown."