News

Colac Strata Retail Snapped Up Before Auction

Posted on 09th June 2022

22

Strong demand for strata-titled retail property assets has seen a Best & Less outlet in Colac snapped up prior to auction on a sharp yield.

Fitzroys’ Chris Kombi and Lewis Waddell sold Shop 2, 118-128 Bromfield Street for $2.41 million at a 3.75% yield, after generating strong enquiry from investors.

The 804sqm modern retail building is leased to ASX-listed Best & Less, in a busy location next to Aldi, BWS, Ricers, Reject Shop and Bunnings, and offers direct access to 195 car parks.

Best & Less’s lease returns $90,500 per annum plus GST.

Kombi said the yield achieved was extremely tight for a strata-titled investment.

“Competition for well-leased strata properties has grown over the past few years as retirees and self-managed super fund investors in particular have sought secure income streams in the COVID-normal and low interest rate environment, and amid volatility in the stock market.

“We’ve seen sharper yields being achieved in this space as a result.

“Strata-titled assets also offer an easier management proposition as an owners corporation oversees maintenance, and low land tax liabilities don’t cut into the return.”

Fitzroys recently sold a strata-titled retail asset in Main Street, Mornington, leased to Home in the Hamptons, for $2.62 million at 3.3%.

“Investors were keen to secure a modern strata-titled asset leased to an ASX-listed tenant in Best & Less, and we also had some potential future occupiers looking to get into a great location among some big names given the lease profile,” Waddell said.

“Colac services a 30,000-plus trade catchment that extends to the Great Ocean Road and presents a lot of opportunities for businesses.

“Buyers were also attracted to the stamp duty savings on offer through the Victorian Government’s regional commercial, industrial and extractive industries property concession.”

Stamp duty payable is reduced by 50% as part of the Government’s concession, which Waddell has brought more metropolitan and regional buyers alike into the regional commercial property market.