Investors from around Australia have sought a securely-leased, high-profile High Street, Northcote asset in one of the first tests of Melbourne’s commercial property market in 2020.
Chris Kombi and Ervin Niyaz of Fitzroys sold 449 High Street, Northcote for $2 million to a local investor at a tight 5% yield.
The immaculately-presented 230sqm property has a commanding corner street frontage of 26.7 metres, and comprises a fully self-contained ground floor retail area.
The property is leased to popular café Bicycle Thieves on a 7+7+7-year lease returning $100,785 per annum. Bicycle Thieves opened in October 2018 and is run by Chris Griffiths and Shri Bhagwandas, whose successful eateries include Hawthorn’s Bawa and Cremorne’s Sloane Ranger.
“Being a strata-titled, inner-city retail property in a high-profile position with a quality tenant, the campaignw presented an early indicator of the Melbourne commercial investment market in 2020,” Kombi said.
“The high volume of enquiry from around Australia and the strong sales result shows retail properties across Melbourne’s strips continue to present a compelling investment proposition.
“There has been a lack of quality retail and commercial properties coming to the market offering secure leases and main street exposure.”
Kombi said the historically low interest rate environment has deepened the pool of investors looking to secure income-producing investments.
“Strata-titled properties have grown in focus, as they easier to manage with an owners corporation overseeing maintenance, and present low land tax liabilities that don’t cut into the return.
“This property offered the added benefit of being only three years old, offering strong tax depreciation benefits and further enhancing its investment credentials.”
Niyaz said the property is strategically positioned within the most densely-populated section of High Street, one of Melbourne’s most sought-after retail and lifestyle precincts.
“There continues to be a growing interest in food and beverage-tenanted offerings in strip locations across the vibrant and edgy inner-north.
“Assets leased to hospitality operators are held in high regard and increasingly represent an iconic Melbourne real estate holding.”
The property is also close to Coles, Kmart and Aldi, and shopping centres Northcote Central and Northcote Plaza, and is surrounded by multiple residential towers.
“High pedestrian traffic and a growing number of medium and high-density residential projects in the vicinity make High Street, Northcote a very tightly-held strip opportunity,” Niyaz said.
“The addition of apartments to the housing stock is a major driver of population growth in the area, boosting the requirement for retail and service retail operators over the long-term.”
According to Fitzroys’ most recent Walk the Strip report, High Street, Northcote retail vacancies tightened to 3.0% during 2019, among the lowest in Melbourne.
Northcote is about to enter a period of surging population growth over the next several years. Darebin’s population is expected to rise from 169,533 in 2020 to 230,118 in 2041, representing remarkable growth of 39.2%.
Public transport options nearby include both Northcote and Croxton train stations only 400 metres away, and a tram stop opposite, and the property is close to major arterial roads providing connectivity to the east, west and Melbourne CBD.