Huge Investor Appetite For Supreme Investment Opportunity

Posted on 06th April 2023

There remains a strong appetite for quality investment opportunities in good locations across Melbourne.

In the latest sale, Fitzroys’ Mark Talbot and Tom Fisher sold 697 Centre Road, Bentleigh East, trading as global giant Pizza Hut, for $855,000 and on a tight 4.3% yield, at a hotly contested auction.

The strata-titled property has a 5+5-year lease ending in 18 months to long-standing tenant of over 20 years Pizza Hut.

Talbot said the sale price was $55,000 over the reserve and reflected a high building rate of $9,300 per sqm.

“We had four registered bidders on the day with two fiercely fighting out the auction,” Talbot said.

“Despite the ongoing interest rate hikes, there’s clearly a strong appetite for well-located, well-leased investment opportunities across Melbourne,” Talbot said.

“Investors continue to find safety in bricks-and-mortar assets.”

The sale achieved a tighter yield than that seen at an auction earlier in the day in Clarendon Street, South Melbourne.

The Pizza Hut property is situated amongst an abundance of national and local operators, including an IGA supermarket, Priceline, Boundary Hotel, Bakers Delight, BWS, Body Fit. KX Pilates, Jetts Fitness, Merchants Guild and more.

Talbot added that there is still strong demand for well-leased strata investment property.

“Many investors continue to turn to strata-titled commercial properties to shore up their income stream amid volatility in the stock market,” he said.

“The high inflation period is expected to be short-lived from here and interest rate rises are likely to come down after a period of stabilisation during this year, making returns on properties acquired now all the more attractive.”

“Well-leased, well-located strata-titled assets tick all the boxes. Typically they offer an easier management proposition, as an owners corporation oversees maintenance, and low land tax liabilities don’t cut into the return.”

Fisher said retail assets in well-performing shopping strips continue to see strong results.

The sales marks another strong result secured by Fitzroys in the area recently.

Among the sales have been: