Smith Street Growth Prospects Wow Investors in $4.575 Million Sale

Posted on 06th September 2019

Surging commercial and residential development centred around Smith Street has attracted huge interest from developers, investors, and land bankers in a versatile freehold in the prime section of the renowned inner-north lifestyle strip.

Fitzroys agents Mark Talbot and Lewis Waddell sold 95-97 Smith Street, Fitzroy, in conjunction with Joel Wald and Simon Watkin of MMJ Real Estate, on behalf of the Zelwer family for $4.575 million at a sharp 3.4% yield.

More than 100 enquiries were received during the campaign, leading to fierce competition between four bidders at auction.

Located within the prime section of Smith Street, and near the corner of busy Gertrude Street, the 434sqm site has a wide frontage of 10.95 metres and a double-storey building of 697sqm.

Waddell said the offering was a quintessential inner-north Melbourne freehold, home to video game-themed nightspot Pixel Alley at street level and popular bar Mr Wow’s Emporium on the first floor. Australian Education Academy also occupies a space on the ground floor of the building. The property returns $184,000 per annum net plus GST with a lease profile expiring in April 2023.

Waddell said the purchaser is a private investor who has acquired the property as an investment and future value-add play.

“The property is in an unrivalled position, surrounded by Melbourne’s best food and hospitality venues, and supported by a rapidly developing apartment and commercial office market.

“A range of buyers were attracted to the property’s attractive Commercial 1 zoning in a high-growth area, with a large number of office and residential developments taking place nearby that will further underpin the strong trading throughout Smith Street and sustain rental growth.”

According to Fitzroys’ latest Walk the Strip report, Smith Street has among the lowest vacancy rates of Melbourne’s iconic shopping and lifestyle strips at just 2.7%, underpinned by its world-class trendy nightlife and hospitality offering. Smith Street is located just one kilometre from the CBD, and is easily accessible via the exceptional transport amenities, including the Route 86 tram.

Surrounding hospitality tenants include Huxtaburger, Ides, Proud Sprout, Trippy Taco, The Builders Arms, Foresters, Sircuit Bar, Yah Yah’s, Biggie Smalls and Tokushima, and the property is also in close proximity to high-performing Coles and Woolworth supermarkets, Kathmandu, Bonds, Chemist Warehouse and major banks.

Talbot said the boom in inner-city living and commercial development on Melbourne’s city fringe has spread over to Collingwood, with a surge in commercial and residential projects anchored around the vibrant Smith Street precinct.

“The vibrant Smith Street and Gertrude Street lifestyle precincts have prompted a local population boom, as Melburnians embrace inner-city living and seek to live and work close to bustling shopping, hospitality and nightlife destinations.”

Major commercial developments include Grocon’s $120 million Northumberland project, Pace Development Group’s 10- storey office building at 51 Langridge Street, a recently announced $200 million office tower by major US investor and developer Hines, and Pellicano Group is planning a new office project at 207 Victoria Parade, on the corner of Smith Street.

Developer Tim Gurner will continue adding to his list of apartment projects in the area with the upmarket Victoria and Vine, while other residential developments in the pipeline nearby include Little Oxford, nearing completion, the recently approved mid-rise project at 88-92 Smith Street, as well as The Lyric on Gore Street, Holme Apartments at 112 Smith Street, the six-level Lil’Ox on Oxford Street, and the seven-level 7 Hodgson Street.