Weekly Wrap

Fitzroys Weekly Wrap - 27th October 2023

Posted on 27th October 2023

203 Barkly Street, Footscray
An investor bought the vacant 210sqm 2-level shop and dwelling for $1.305 million, with plans to refurbish and re-lease the property. It is on a 210sqm site within an Activity Centre Zone.

79-81 Malop Street, Geelong

A Melbourne-based investor paid $2.525 million for the vacant retail building, which is on a 498sqm Activity Centre-zoned site in the Geelong CBD.

471-473 Chapel Street, South Yarra

A local investor bought the 210sqm and 144sqm properties on a building rate of $11,723/sqm and a land rate of $12,613/sqm.

68-76 Percy Street, Portland

The fully-leased 1,500sqm building with 7 retail and 7 residential tenancies, on a 1,513sqm Commercial 1-zoned site, sold for $1.91 million, on a 7.52% yield. It returns $143,720pa plus GST.

30 Pynsent Street, Horsham

The 149sqm property occupied by Chickpea Café sold for $486,000, on a 6.12% yield. It has a renewed 3-year lease with options to 2032, returning $29,764pa plus GST.

765 High Street, Kew East
An owner-occupier bought the 312sqm building, on a 407sqm Commercial 1-zoned site, for $1.62 million. The property has been used for medical purposes for 60 years.

11/400 Canterbury Road, Surrey Hills

The 169sqm fitted-out office with 5 undercover car parks sold for $1,238,800.

154-160 Stanley Street, West Melbourne
An owner-occupier bought the 496sqm warehouse site for about $4 million, and will use the existing improvements for a residential conversion.

8/23-35 Bunney Road, Oakleigh South

The 218sqm office and warehouse unit with 3 car spaces sold for $680,000.

13 Galway Drive, Alfredton
A local developer bought the 1.73ha site for $3.8 million. The property is located in the Ballarat West PSP and is allocated for medium density.

555-557 Princes Highway, Narre Warren
The 405sqm building purpose-built for Ambulance Victoria in 2010, on a 1,406sqm site, sold for $3.03 million. Ambulance Victoria has a renewed 6-year lease to September 2029 with an option to 2035, currently returning $110,940pa net plus GST.

Trophy Corner Investment in the Heart of South Yarra Smashes Reserve, Sells for $6.23m
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.

Bay Street, Brighton Proves Pull for Investors
The sale of a Bay Street retail property on a sharp 3.6% yield is the latest evidence of the emergence of the Brighton shopping strip as a popular location for investors in its own right.

Fitzroys’ Mark Talbot and Tom Fisher sold 336 Bay Street for $1.085 million, on a sharp yield and high building rate of $18,700/sqm, on behalf of a private investor.

The open-plan 58sqm building, on an 87sqm site, has a full-height, high-exposure glass shop front and is occupied by established and multiple store tenant Serenity on a lease expiring at the end of March 2024, with options through to March 2028.

The campaign generated huge enquiry that was dominated by investors, Talbot said.

“The purchaser is looking at using the property as a long-term hold, willing to take on any risk of a short-term lease and more than confident in the demand from retailers and trade prospects along Bay Street,” he said.

“Bay Street, Brighton serves one of Melbourne’s most prized catchments with prestigious schools, which has maintained a strong demographic with high disposable income, supporting strong retail trade.

Talbot said the 3.6% yield is a great result, up there with Fitzroys’ recent $7.15 million sale of the NAB branch building on Church Street, at 3.5%.

According to Fitzroys’ Walk the Strip report series, Bay Street, Brighton has seen vacancies come down to a long-term low of 5.9%. Talbot said the Coles development close by has added a new dimension and created another prime section of the strip.

“Bay Street has typically been in shadow of Church Street when it comes to retail in the area, but it’s really come into its own as a shopping and lifestyle strip over recent years, and investors are taking note,” Talbot said.

“The strength of Bay Street has recentred the suburb. More people in Brighton and the surrounding suburbs gravitate towards Bay Street and it means there’s more demand and expectation for shopping, dining and medical offerings on the strip.”

The 336 Bay Street property is close to a lot of popular national and local operators, including Coles, Chemist Warehouse, Australia Post, Flight Centre, Palace Cinemas, Hotel Brighton, Mr and Mrs P, Rocksalt and more.

Fisher said the the property is also very accessible, which was a further attraction to buyers.

“There’s excellent parking options with car park directly behind the property, and the site also offers easy access to the CBD via Nepean Highway and it’s walking distance to North Brighton train station,” he said.

Wyndham Vale Estate Sells for $250m
Chinese housing development giant Country Garden has sold the undeveloped portion of its Wyndham Vale estate Windermere, in Melbourne’s western growth corridor, for close to $250 million.

Singapore’s Frasers Property is the purchaser.

The entirety of Windermere covers 366ha. Once fully developed, it is expected to deliver 4,500 to 5,000 dwellings, 4 schools and a retail village.

    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.