Trophy Corner Investment In The Heart of South Yarra Smashes Reserve, Sells For $6.23m

Posted on 26th October 2023

Melbourne’s prime shopping strip market has passed another major test in 2023, with local and overseas investors vying for an incredibly rare Toorak Road, South Yarra trophy investment opportunity that smashed the reserve and sold under the hammer for $6.23 million.

Fitzroys’ Lewis Waddell, Chris Kombi and Ben Liu sold 109-111 Toorak Road & 1A-1C Murphy Street, South Yarra on behalf of a local family that has held the property for almost 50 years.

A locally-based investor with offshore backing was the purchaser, with the sale price coming in well above the reserve and reflecting a sharp 3.2% passing yield.

The freehold building comprises 390sqm of building with 5 shops plus a first-floor office and has an expansive street frontage of over 37 metres in the absolute prime trading section of Toorak Road, South Yarra.

The multi-tenanted investment is underpinned by a renewed 5-year lease from March 2024 to national real estate group McGrath and offers a current total income of $218,000pa net.

“The property is in the absolute prime trading section of Toorak Road and on the corner of a prestigious street in Murphy Street, making this an ideal trophy investment, and buyers recognised how rare an opportunity this was to buy a prime corner building like this in South Yarra, which are typically held onto for generations,” Waddell said.

“Blue-chip properties in these locations very rarely come up for sale and the market is very aware of this. The property also has a strong lease profile and was underpinned by a recent lease renewal to anchor tenant McGrath, which gave buyers more confidence to push themselves,” he said.

“We continue to see investors put their faith in income-producing bricks-and-mortar assets at a time of share market and residential market volatility. We have yet more evidence that higher interest rates clearly aren’t deterring investors from pursuing high-quality opportunities.

“Prime assets in Melbourne’s shopping strips offer excellent investment credentials. They’re experiencing a real period of renewal at the moment, with vacancies at a long-term low as Melburnians spend more time than ever at their local villages, supporting trade, while developments on and around the strips are underpinning future trade prospects.”

Kombi said buyers were also driven to the property by the high growth prospects of Toorak Road, South Yarra, given the ongoing development at the neighbouring high-density Forrest Hill precinct, as well as projects such as Oreana’s $250 million redevelopment of South Yarra Square, and the $1.5 billion overhaul of the nearby Jam Factory.

According to Fitzroys’ latest Walk the Strip report, vacancies in Toorak Road, South Yarra have come down again in 2023 to 5.6%, and have nearly halved since 2021.

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