Strong Demand For Healthy City Fringe Investment Amid Development Boom

Posted on 07th February 2023

Commercial and residential development around Melbourne’s hugely popular Smith Street precinct in Collingwood is attracting investors looking for long-term holds.

Fitzroys’ Lewis Waddell and Ervin Niyaz sold 6 Smith Street on behalf of a local investor for $1.935 million, on a tight 4.9% yield.

The property comprises a double-storey 215sqm building leased to established medical operator Fertile Ground Health Group. It is within an established hospital and medical precinct close to the Epworth Hospital, St. Vincent’s Hospitals, the Royal Victorian Eye and Ear Hospital, and a number of specialists and surgeries.

Waddell said a private local self-managed super fund investor was the buyer, planning to use the property as a long-term hold with passive income.

“There’s a huge opportunity for growth in this section of Smith Street with all the development happening,” Waddell said.

“Local and overseas investors, as well as surrounding owners all made enquiries, looking to take advantage of the growth prospects.”

Close by is the rapidly developing Collingwood office market with multiple projects recently completed and underway. Among them are the $111 million 54 Wellington by Impact Investment Group, global investment group Hines’ $200 million 15-level timber tower, Peregrine Projects’ 88 Langridge Lane, which will become the new Australian and Asian head office of Aesop as well as home to Swisse Wellness, and recently completed buildings at 71 Gipps Street and 51 Langridge Street,

The area is also seeing major residential developments such as Gurner’s Victoria and Vine and E.S. Smith, and a host of boutique projects including by both Neometro and Piccolo on Gore Street and a new hotel on Rose Street.

Niyaz said Smith Street and Gertrude Street is a world-class day and night hospitality and lifestyle precinct, with iconic bars and eateries such as Marion, Builders Arms, Cutler and Co., Anada, Arra and more, and has recently held the title of Time Out’s “Coolest Street in the World”.

Niyaz said inner-city locations with excellent lifestyle qualities are popular with Melburnians, particularly flexible working arrangements become commonplace.

“The market’s seen overwhelming evidence for demand in the immediate area across multiple commercial and residential projects, boosting the local population and activity at all hours, which bodes well for traders and investors in the area over the coming years.”