Strong competition for a neighbourhood café investment has reaffirmed buyers are taking a longer-term view beyond current uncertainties, and continue to chase quality Melbourne retail and commercial property opportunities.
A local investor bought the well-presented 140sqm two-storey building, on a 217sqm site with a 6.1m frontage with rear access via Hunter Road.
Highly successful Dish & Spoon Café has a new 5+5+5-year lease returning $62,563 per annum plus outgoings and GST.
“The tenant is the definition of a strong local operator with a captive audience,” James said.
“The purchaser is familiar with the tenant’s business. Despite the purchaser’s knowledge of the tenant’s current struggles in the COVID-19 environment, he is obviously very confident their business will bounce back once closures cease.”
James said buyers are still identifying and actively pursuing great opportunities in the market.
“Sales across Melbourne’s retail and commercial property investment spectrum are still taking place, despite speculation sales may grind to a halt with auctions put on hold.”
More than 60 parties made enquiries for the property in a campaign dominated by private and self-managed super fund investors. Kombi said the historically low interest rate environment and volatile stock market have deepened the pool of investors seeking investments with quality fundamentals.
“Private and self-managed super fund investors have kept a longer-term perspective and see it preferable to put their money into securely-leased, income-producing and well-located retail and commercial property assets, which offer a better return than having money sit in the bank, and more certainty than put into shares.”
He said the property presented a rare opportunity to secure an affordable retail freehold within a tightly-held and well-supported pocket of Camberwell.
“The inner-eastern suburbs offer among Melbourne’s most prized catchments, comprising an established, affluent and loyal local residential population.”
This has been strengthened by medium and high-density residential development, enhancing the immediate catchment and boosting trade. Major projects close by include the $175 million mixed-use, dual tower Camberwell Village, and Chinese development giant Dahua Group’s Hawthorn Park.
James said the campaign marked the latest demonstration of strong retail property enquiry and sales results in Camberwell.
Fitzroys has just sold the Commonwealth Bank branch at 735-737 Burke Road in Camberwell for $12.06 million, at a sharp 3.5% yield, and the dual-fronted freehold at 628 Burke Road for $4.28 million. Last year, Fitzroys sold 947 Burke Road for $1.72 million, at a tight 4.3% yield, and the two-level building at 849 Burke Road for $1.675 million at 4%.