The Puckle Street Collection Sells For $5.61m

Posted on 30th May 2023

Investors and landbankers have jumped at the generational opportunity to buy three side-by-side freeholds in one of Melbourne’s best-performing shopping strips.

Fitzroys’ Ervin Niyaz and Chris Kombi, in conjunction with CBRE’s Alex Brierley and JJ Heng sold the unique offering of 42, 44 and 46 Puckle Street in one line for $5.61 million.

The sale price reflected a sharp 3.4% yield and a high land rate of $10,226 per sqm, and was well above the vendor’s expectations.

The three shops are all leased to experienced operators, including Smile Thai on a five-year lease from October 2019, and State of Grace Collective on a 4+3+3-year deal and Body Catalyst on a 3+5-year deal, both from May 2021.

The properties are on a substantial combined land area of 547sqm with over 15 metres of frontage to Puckle Street, offering great development upside with surrounding projects of nine-plus levels, including the landmark Penny Lane development across the road which is delivering 114 apartments, a Palace Cinemas and Guzman y Gomez to the strip.

“The buyer is a landbanking investor who saw the incredibly unique opportunity to buy three side-by-side freeholds and this large amount of land in one of Melbourne’s best shopping strips,” Kombi said.

“This kind of opportunity hasn’t come up in Puckle Street for at least 30 years.

“The purchaser can enjoy a strong income stream while they assess their options for the site over the medium-term. The sharp yield reflects the competition generated in the sales process and the huge confidence the market has in the future of Moonee Ponds. This was an excellent chance to invest in what is quickly becoming the lifestyle hub of Melbourne’s north-west with a proven track record for capital growth.”

“We also had interest from investors wanting to buy the shops both individually and in one line, attracted to the excellent trading prospects and future rental growth potential due to the ongoing completion of new projects in the surrounds.

According to Fitzroys' new Walk the Strip report, vacancies on Puckle Street, Moonee Ponds came down from 4.6% to 3.2% in 2022, among the lowest of Melbourne’s iconic shopping strips. The precinct also includes Moonee Ponds Central shopping centre, a Woolworths supermarket, and a number of local and national eateries and service retailers.

Niyaz said Puckle Street’s excellent performance in recent years and capital growth in the precinct was underpinned by the generational development boom that is taking place in Moonee Ponds, which has seen the delivery of the Mason Square precinct and will be further supported by ongoing developments such as Penny Lane, and the future $2 billion residential and lifestyle overhaul of the Moonee Valley Racecourse nearby that will introduce 2,000 new dwellings as well as commercial space to the area.

“A huge number of Melburnians are looking to live in well-connected inner-suburban locations with high-quality and varied lifestyle and hospitality amenity, particularly at a time of flexible working arrangements. Moonee Ponds ticks all the boxes, with a high-performing shopping, hospitality and lifestyle precinct anchored by Puckle Street, and excellent public transport linkages by train, tram and bus,” Niyaz said.