Weekly Wrap

Fitzroys Weekly Wrap - 17th November 2023

Posted on 17th November 2023

107 Toorak Road, South Yarra
A local investor bought the retail building, occupied by a women’s fitness studio, for $2.02 million, on a 2.87% net yield.

274-276 Blackburn Road, Doncaster East

A local buyer bought the 275sqm building on a 326sqm site for $4.77 million. Chandra Pharmacy, which has occupied the property for around 50 years, has a lease until June 2032 returning $225,752pa plus outgoings and GST.

65-67 Evans Street, Sunbury

An investor bought the 756sqm building on a 513sqm site for $2.601 million, on a 6.13% yield. Westpac occupies the ground floor on 5-year lease to 2026 plus options to 2032, and bar Piano on Evans has a 5-year lease to 2027 with options to 2027 on the first floor. Net income is $159,387pa plus GST.

72 Jackson Court, Doncaster East

The 258sqm shop and 3-bedroom residence sold for $1.895 million. It is leased to Olympus Delicatessen and returns $49,500pa.

565-581 Sydney Road, Coburg

The fully-fitted petrol and convenience station was leased at $320,000. It has a building area of 150sqm and 6 pump islands under a canopy on 1,898sqm of land.

16 Claremont Street, South Yarra
A Sydney investor bought the new Malaysian Consulate-occupied property for $6.5 million, on a 6.9% yield. The 954sqm office on levels 1 and 2 of the 26-level tower has a 10-year lease returning $451,000pa. Listed Malaysian developer EcoWorld, which completed the tower in 2020, was the vendor.

55-59 Lillee Crescent, Tullamarine
A local owner-occupier paid $2 million for the 595sqm office and warehouse, which is on 768sqm of land.

36-38 Roberts Street, West Footscray

Logistics firm Paddock to Port leased the 2.1ha corner site, which has a 7,821sqm building, at $1.5 million per year.

30-36 Cyber Loop, Dandenong South

Teoma Group leased the 1,435sqm facility at $275,000pa, or $192/sqm.

1/14 Pearl Street, Brooklyn

The 360sqm office and warehouse with 4 allocated car parks was leased a $48,000pa.

Booringa Road, Princetown
Sydney-based developer Sheargold Group acquired the 78.6ha site, opposite the 12 Apostles, for more than $15 million. Don Musto, Peter Quattro and Dug Pomeroy sold the site after securing approval for a 4,092sqm eco-resort with 363sqm of bathing facilities, 150 accommodation pods, a wellness spa and conference facilities.

25-27 Brookwater Parade, Lyndhurst
A private investor bought the 845sqm childcare facility, which is on a 2,594sqm site, for $5.7 million. ASX-listed operator G8 Education has a 22-year net lease to 2038 with options to 2048.

Superb Toorak Investment Sells on Stunning 1.8% Yield
A superb, perfectly-located freehold in prestigious Toorak Village has smashed expectations and sold under the hammer on a stunning 1.8% net yield - likely the lowest achieved in 2023 for a true investment play in Melbourne’s established shopping strips. Fitzroys’ Mark Talbot and Lewis Waddell sold 416 Toorak Road in Toorak Village - which is undergoing an unprecedented evolution - for $2.7 million, on behalf of a private investor who had owned the property since 1985.

The purchaser is a local investor who has purchased commercial property throughout Melbourne and knows the area well, and will hold the property as a passive investment.

The open-plan shop, home to multi-store boutique Euro Collections, is on an irreplaceable landholding of 196sqm with an exceptional 5.9m frontage to Toorak Road. It has a 3-year lease plus options to 2028 with annual rent reviews and a market review at option.

“This was an incredibly bold demonstration from the market that income-producing bricks-and-mortar assets along Melbourne’s shopping strips are considered a safe investment option, particularly at a time of sharemarket and residential market volatilty,” Talbot said.

“We have yet more evidence that multiple interest rate rises haven’t deterred cashed-up investors from pursuing high-quality opportunities. Buyers are willing to pay a premium price in established, land-rich areas where they can see high-disposable income and strong demographics.

“We had 4 bidders - all investors - compete fiercely for the property, taking the sale price $500,000 past the reserve.”

Talbot said, “The market recognised this was an ultra-rare chance to get into one of Melbourne’s most prestigious shopping strips, Toorak Village, which is witnessing a generational period of revitalisation.”

“The purchaser saw the rental growth and revitalisation of the Village as a huge positive. The new Orchard Piper development a few metres away was a big drawcard,” he said.

“The property's surrounded by a plethora of new developments. Orchard Piper is developing a $120 million 6-level mixed-use, high-end project, right near 416 Toorak Road, as well as a $400 million boutique apartment project moments away on the Mercedes-Benz dealership site on Carters Avenue, while Vicland’s St Germain development has just delivered offices and a Coles Local supermarket to Toorak Village,” he said.

“Toorak Village has always enjoyed the benefits of servicing what is one of Melbourne’s most affluent and established catchments. More locals rightsizing into apartments on and around the strip, as well as more people working from its new offices are adding more people to the catchment, further boosting day-to-day trade.”

“Developments along the strips are boosting trade prospects and security of rent income.”

According to Fitzroys’ latest Walk the Strip report, Toorak Village recorded a sixth-straight year of single-digit vacancies.

“Toorak Village is one of the best examples of the renewal currently being seen across Melbourne’s iconic shopping strips, which since COVID have recorded elevated rates of sites being used for new developments,” Talbot said.

This is the second benchmark sale in Stonnington shopping strips that Fitzroys has achieved in just a few weeks. Fitzroys has just sold a trophy corner investment in the absolute prime of Toorak Road, South Yarra, at 109-111 Toorak Road & 1A-1C Murphy Street, for $6.23 million, well above reserve and on a sharp 3.2% passing yield.

Fitzroys has recently sold multiple assets in the prime of Melbourne’s high-performing shopping strips. It has also sold 1014 High Street, Armadale for $3.525 million, on a sharp 3.4% yield, and 35 Church Street, Brighton, home of big 4 bank NAB, for $7.15 million on a 3.5% yield and land rate of $24,826/sqm.

    Disclosure: The weekly Fitzroys Property Wrap is for information only on transactions in the Melbourne property market. Fitzroys provides this information as a public service. We are not purporting that all sales and leases within this report were transacted by Fitzroys. Terms/Privacy © Copyright 2023 Fitzroys.