The BaiFuXin Family Office is the purchaser, intending to use the property as an investment for now and develop in the future.
BFX Family Office sees great value in this particular pocket, with the purchaser already owning 858 Glenferrie Road, Hawthorn, which has a permit for a seven-level, 87-room Novotel Hotel that is expected to open in 2023.
“Melbourne shopping strips have proven their resilience during COVID. Investment, occupier, land bank and development opportunities in the prime of shopping strips remain a compelling proposition,” Kombi said.
“We’ve seen multiple types of opportunities transact in recent weeks. Sites have traded as trophy investments, repositioning opportunities, and for landbanking and development.
“Over the past two years our local shopping strips have been the place to go for a coffee or have something to eat and break up the day, or to catch up with people and to go shopping.”
In recent weeks, Fitzroys has sold over $50 million worth of shopping strip properties within Melbourne’s famous shopping strips. They have included a $16.2 million sale on Church Street, Brighton, and major deals on Glenferrie Road, Malvern; Burke Road, Camberwell; and Chapel Street, South Yarra.
The Glenferrie Road, Hawthorn sale price reflected a sharp net yield of 2.2%, and a building rate of $16,000 per sqm and land rate of $7,151 per sqm.
The large underutilised 809sqm site, zoned Commercial 1, comprises a fully-leased 360sqm building of two shops and four office suites, returning a net rental of circa $129,000 per annum from six established tenants. It also has on-site parking for at least 14 vehicles.
James said interest came from local and national parties, including some backed by offshore capital.
“Investors were seeking a quality diversified income stream, while value-add players, developers and landbankers all recognised the large site area’s underutilisation and favourable zoning. The common thread was that all of these buyers were attracted the reputation of Glenferrie Road, Hawthorn.”
The strip has been among the better performers of Melbourne’s shopping strips throughout COVID, according to Fitzroys Walk the Strip report, with vacancies remaining steady since early 2020.
“The prime section of Glenferrie Road has remained as strong as ever. The return of students to Swinburne University has brought renewed activity across the strip throughout all hours, underpinning the buzzing hospitality offering,” James said.
He said further upside in the strip can be found in the fast-growing Hawthorn office market, which has seen strong demand in the changing working environment. The highly accessible inner-suburban location with the quality lifestyle offering of Glenferrie Road at its doorstep is hugely attractive to businesses looking to attract and retain employees.
Meanwhile, Boroondara Council’s Glenferrie Placemaking Plan will be carried out over several years with the mission of improving connectivity throughout Glenferrie Road, and Council is also looking to redevelop its owned car park sites in the precinct to accommodate multi-level parking and increase capacity.