16 Out of 16 At Fitzroys’ Melbourne Retail Portfolio Auction

Posted on 27th June 2022

Well-located retail property remains a highly sought-after investment amid sharemarket and residential market volatility, with $29.14 million worth of property across Melbourne sold at Fitzroys’ Melbourne Retail Portfolio auction today.

Fitzroys’ Mark Talbot, Tom Fisher and Chris Kombi marketed the portfolio, amassed by late businessman Harry Oviss, which went to auction at Leonda by the Yarra in Hawthorn.

The entire portfolio of 16 retail properties, set across 10 Melbourne suburbs and carefully collected over 70 years, sold on the one day at an average net yield of 2.99%.

Three properties in Alfrieda Street in St Albans sold for a combined $7.28 million on an average net yield of just 2.4%. They are all leased on 5+5 year deals to eateries Quang Vinh (sold for $2.51 million, at 1.99%), Xuan Xinh ($2.42 million, 2.56%) and Pho Kim Long ($2.35 million, 2.63%).

Five fully leased properties sold at sub-3% yields, including a shop in the heart of Hampton Street, Hampton and adjacent to the Woolworths leased to a giftwares and tobacco shop. Another four sold below 4%. They included a dominant corner property at the gateway of Koornang Road, Carnegie leased to three tenants Vault 143, Spilt Milk and Thompson & Thompson.

“Interest rate rises clearly haven’t perturbed the market, despite negative press,” Talbot said.

“Property continues to be in good demand, and we saw this in the global financial crisis also. Investors clearly consider well-located Melbourne retail properties with quality leases a secure investment amid sharemarket and residential market volatility

“The overall result is testament to the transparency and competitiveness of the auction process as well as the marketing campaign.

“Much of the interest came from buyers who knew their local area well. Investors, value-add players, land bankers and developers all showed interest. Many of the properties offered long-term leases in place to proven tenants while also enjoying the benefit of future value-add potential.”

“Investors ranged from entry-level and first-time market participants to self-managed super fund buyers and more seasoned investors, all looking for secure long-term investments amid sharemarket and residential market volatility.

“Well-located commercial property with long-term leases and sizeable annual increases like these are considered to present a more secure investment and safer place to put money in the current climate, even with further interest rate rises expected.”

Other properties to sell included shops in the heart of Swan Street, Richmond; High Street, Cranbourne; and Ranelagh Drive, Mount Eliza.

Kombi said, “The market has acknowledged the resilience shown by Melbourne’s shopping strips over the past two years. The COVID period has reinforced their role as a place for Melburnians to connect with their local communities. Our ‘local village’ became something more than a place to run errands and do the shopping - it was the place to get a coffee, meet friends for a walk, or to break up the day while we were all working from home,” Kombi said. said.

Other properties to sell included assets in the heart of Swan Street, Richmond; adjacent to the high-performing Woolworths in Hamptothe gateway to Koornang Road, Carnegie.