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Melbourne’s Prime Shopping Strip Market Passes Another Early Test

Posted on 02nd May 2022

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Melbourne’s prime shopping strip market has passed yet another early test in 2022, with a multi-tenanted property in the heart of Glenferrie Road, Malvern selling for $7.15 million at a tight blended yield (retail and office) of 4.1% yield.

Fitzroys’ Chris Kombi and Mark Talbot, in conjunction with Aston Commercial’s Rodney King, sold 193-195 Glenferrie Road & 86-92 Union Street on behalf of a private investor who had owned the property for 30 years.

A local buyer purchased the property.

The sale price relfected a high land rate of $21,280 per sqm and building rate of $14,896 per sqm.

The property comprises a two-storey 460sqm building with five ground-floor retail spaces and a first-level whole-floor office, on a 336sqm site zoned Commercial 1. Fully leased, it returns $310,000 per annum plus outgoings and GST from tenants Cannings Butchers, Urban Man, Peter Cat Café, Melanie K Hair, C-Free Day Spa and S&K Group on a range of lease terms.

It is on a dominant corner position with combined frontage of 55 metres directly opposite Glenferrie Road’s anchor tenant and major drawcard, Coles supermarket, in a high foot traffic location and surrounded by national retailers, all major banks and a host of popular eateries.

“This was a generational opportunity to secure a significant freehold within the prime trading section of one of Melbourne’s strongest-performing retail strips,” Kombi said.

“We had huge interest and received multiple offers from investors and land bankers from Melbourne and across Australia.”

“Buyers noted that Glenferrie Road is one of Melbourne’s most consistent shopping strips, with a quality mix of national and established local traders servicing a prized affluent and broad catchment, and has benefited from continued high spending on retail, food and beverage and services over the past two years.”

“Land bankers could acquire a dominant corner site opposite the strip’s anchor tenant - a high-performing Coles supermarket - and enjoy a strong diversified income stream while assessing their options for the property.”

According to Fitzroys’ Walk the Strip series, Glenferrie Road, Malvern is “arguably the best example of strip centres providing an environment that people want to shop and find community in”.

Talbot said, “Shopping strips have proven their resilience throughout COVID, and assets in prime locations remain compelling opportunities.

“We’ve seen yet again that there’s pent-up demand and large volumes of capital waiting to be deployed in the market after an extended period of low levels of quality stock being presented.”

In the prime Melbourne shopping strip market’s first auction test for 2022, Fitzroys sold a unique offering in the absolute prime of Burke Road, Camberwell under the hammer for $6.66 million, to an investor with tenant NAB set to vacate in June.

Fitzroys is also currently going through the second round of Expressions of Interests for 71-73 Church Street & 36 Carpenter Street, in the heart of the famous Church Street, Brighton strip.