Buyers across the investment spectrum are on the hunt for yield-producing and well-located retail assets across Melbourne as interest rates sit at a record low, and growth corridors are proving to be particularly popular.
Fitzroys agents Chris Kombi, Terence Yeh and Lewis Waddell sold an exceptional retail investment within the Polaris Town Centre in Melbourne’s northern growth corridor for $2.6 million under the hammer which represented a building rate of over $10,600 psm.
Kombi said multiple bidders competed for the asset, which sold at a 5.5% yield
The property comprises a well-presented ground floor café and restaurant of 245sqm, with a distinctive full glass corner frontage of a combined 34 metres. It has a secure 5 x 5-year lease to a proven operator trading as Cafe Vorea, open each for breakfast, lunch and dinner, with 4% fixed annual increases.
Located at the Plenty Road entrance to Polaris, opposite Dan Murphys and Chemist Warehouse, the investment is located among neighbouring major retailers including Woolworths, Gloria Jeans, Pizza Hut and Subway.
Kombi said the set-and-forget investment attracted buyers across the investment spectrum, from experienced investors to new entrants, and those looking for a self-managed super fund investments.
“Following recent cuts to the official interest rate, investors are seeking strong income-producing, securely-leased assets in locations with healthy growth prospects.”
Yeh said buyers were attracted to the offering’s quality fit-out, and its high-profile position within one of Melbourne’s strongest growth corridors.
“The property is ideally located to capitalise on population growth in the immediate vicinity and throughout Melbourne’s northern suburbs, and in its role as the closest retail precinct to La Trobe University, the southern hemisphere’s largest university catering for more than 40,000 students and staff.”
Polaris Town Centre comprises a full-line Woolworths supermarket, 34 specialty stores, childcare centre, medical facilities and more than 500 dwellings, which will increase to 1,100, offering a mix of apartments and townhouses, while Springthorpe and Lancaster Gate residential estates also adjoin Polaris.
According to population research house .id, the Bundoora-McLeod area alone is in the midst of a population surge, currently at a very high 4.35% per annum, and which is forecast to remain above Greater Melbourne’s nation-leading rate until at least 2026.
Waddell said the property’s connectivity was also a drawcard for buyers, well-serviced by major arterial roads including the Metropolitan Ring Road and the Eastern Freeway, as well as trams to the city and multiple bus routes, further enhanced by free bus services operating between the University and Polaris during normal university hours.