Premier Brighton Investment Leased To ASX-Listed Major Lender

Posted on 06th July 2023

Arguably Australia’s best-performing shopping strip, Church Street, Brighton, is set for a rare property auction in one of the best Melbourne strip retail investment offerings for 2023.

Fitzroys’ Mark Talbot and Tom Fisher are marketing 35 Church Street, with a renewed lease to long-standing tenant, major lender NAB, and which will go to auction on Thursday, 27 July at 1pm.

Expectations are of $6.7 million-plus.

The property is on a substantial site area of 288sqm with a large 8.5-metre frontage to the prime of the strip.

NAB, which has been at the site for 30 years, has a renewed 5+5+5-year lease that brings a strong income of $254,616 per plus outgoings including land tax.

“This is undoubtedly one of the best Melbourne shopping strip investment opportunities of 2023,” Talbot said.

“It’s hard to find more than a good-sized property with a renewed, secure lease to an ASX-listed big four bank in the prime of Melbourne’s best-performing shopping strip.

“The benefit of land tax being recoverable from the tenant is a huge attraction to investors looking to purchase this type of asset, and together with a secure lease-term makes this investment close to risk-free.

“Income-producing bricks-and-mortar assets remain a safe investment option, and multiple interest rate rises haven’t deterred investors from pursuing high-quality opportunities. We’re expecting interest from locals and Melbourne buyers, and from interstate and international parties as well. Church Street, Brighton’s reputation as one of the best Melbourne shopping strip locations to invest reaches far and wide.”

The property is positioned within the most highly sought-after and tightly-held prime section of Church Street, between Carpenter and St Andrews Streets. Neighbouring tenants include a number of Australia’s leading high-end retailers in Country Road, Mecca, Scanlan Theodore, Seed Heritage, Bed Bath N’ Table, Sportscraft, Husk and Saba while the famous Dendy cinema complex is opposite.

“Melbourne’s shopping strips have demonstrated their resilience over recent years, and none more so than Church Street, Brighton,” Talbot said.

According to Fitzroys’ most recent Walk the Strip report, Church Street, Brighton recorded the lowest vacancy of any of Melbourne’s iconic shopping strips in 2022, at just 0.7%. Its long-term average of 1.68% is well below the Melbourne-wide average of 8.07%.

“Church Street’s strong reputation, affluent and established catchment, and constrained supply will continue to see commercial property tightly held, with a long queue of retailers and operators always seeking space. These have created excellent conditions for reliable rental growth,” Fisher said.

Brighton enjoys a strong demographic and high disposable income from the immediate neighbourhood with the median house price for Brighton at a substantial $3.2 million.

“The immediate catchment has been bolstered with the introduction of medium-density residential developments in what is broadly a low-rise suburb, while the suburb is home to a number of highly sought-after private schools,” Fisher said.

Fitzroys has been responsible for almost all sales along Church Street since September 2019. Those sales have included the $16.2 million sale of 71-73 Church Street & 36 Carpenter Street, home to Nike, Ecco and Laurent, on a 3.8% yield, 51 Church Street, home of Flight Centre, last September for $4.45 million, and 13 Church Street, home to international retailer Oroton, which sold for $6.07 million in 2021 at 2.5%.

Fitzroys last year also sold the trophy investment opportunity at 28 Carpenter Street, just moments from Church Street, for $8.38 million under the hammer, on a very sharp 3.08% yield.