Melbourne’s prime shopping strip market has passed another test in 2024, with a corner property in the “Paris end” of Toorak Road, South Yarra selling under the hammer for $2.16 million, on a sharp 3.7% yield.
Fitzroys’ Lewis Waddell, Ben Liu and David Bourke sold 17 Toorak Road on behalf of a private owner in the first time the property had been offered to the market in 28 years.
The strong bidding from multiple parties pushed the price $210,000 beyond the reserve, with a local buyer eventually winning out.
The property comprises a single-level building that is fully serviced for food and beverage use, occupied by La Parisienne Café and Charcuterie on a lease to April 2029.
It is on a 150sqm site in a prime South Yarra location within an established hospitality precinct, just a few doors down from Melbourne icon France Soir, and close to notable eateries including Bar Carolina, Tetto, Cosi, and many more.
“This is one of the sharpest yields achieved this year to date for a prime Melbourne shopping strip investment,” Waddell said.
“The purchaser was attracted to the property’s prime location in a popular Melbourne shopping strip experiencing a period of generational renewal. Vacancies are at a long-term low along the shopping strips 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.”
According to Fitzroys’ latest Walk the Strip report, Toorak Road, South Yarra vacancies have nearly halved since 2021, from 10.1% down to 5.6% in 2023.
Fitzroys has now sold more than $18 million worth of prime shopping strip retail assets on Toorak Road over just several months. The most recent was the $5.15 million sale of 91-93 Toorak Road, South Yarra, on a very sharp passing net yield of 1.8%. The 415sqm building is occupied by a La Porchetta restaurant and an optometrist.
Bourke said 17 Toorak Road is located close to the Botanical Gardens and Domain Hill residential enclave, well-positioned to South Yarra train station, and surrounded by many key developments that will continue to make South Yarra more dynamic. These include the ongoing development of the nearby Forrest Hill precinct, as well as Oreana’s $250 million redevelopment of South Yarra Square, V-Leader’s $90 million Hotel Claremont project and the $1.5 billion overhaul of the Jam Factory.
The sale of 17 Toorak Road is the latest of a prime Melbourne shopping strip asset by Fitzroys in the early months of 2024. Fitzroys has also sold the 325 Lygon Street property, home to the Carlton Newsagency and in the absolute heart of the famous dining and lifestyle strip, for $1.78 million and on a tight 4% yield, as well as 98-100 Lygon Street in Brunswick East, which sold for $3.38 million, at 4.7%.
Liu said, “Asian heritage buyers are certainly among the most active buyer groups in the current market.
They have been particularly keen on investments throughout Stonnington and Melbourne’s shopping strips.
“Fitzroys has been tracking and servicing these buyers and they have been active in campaigns and participating in our auctions, with the outcome being added competition and strong results for our clients.”