A Geelong CBD healthcare property investment has sold under the hammer after another campaign that saw national interest in the fast-evolving city.
Fitzroys’ Chris Kombi and Lewis Waddell, in conjunction with Andrew Prowse and Tim Darcy of Darcy Jarman, sold 36 Ryrie Street, Geelong under the hammer for $1.59 million, on a 5.6% net yield, and high building rate of $12,000 per sqm.
The property has a corner frontage of 24m and is leased to national operator MoleMap on a brand-new eight-year lease with two further terms of five years each, returning $90,000 per annum plus GST, with 4% annual increases.
Kombi said, “This is a very bullish yield for a strata titled commercial asset in Geelong.”
“This impressive outcome highlights how a secure lease to an essential service provider significantly boosts investor appeal. Traditionally, strata yields in Geelong are higher than those seen in Melbourne, however the presence of a reputable tenant can have a positive flow on effect and compress the yield.
“Furthermore, well-located assets with long leases to health and wellness operators are attracting a range of investors seeking security at a time of volatility in the residential and share markets.”
The property is positioned on the ground floor of the $200 million Geelong Quarter mixed-use development, which includes a 114-apartment tower and the 180-room Holiday Inn Hotel, in the heart of Geelong’s booming CBD and its flourishing medical and health precinct. Major traffic drivers located in immediate surrounds ensure constant foot traffic, supporting trade throughout the day and into night.
“The transformation of the CBD and broader region means we’re consistently seeing Geelong properties attract interest and bidding from local, Melbourne and interstate groups,” Waddell said.
“In this case, the property sold to a Melbourne-based buyer, with the underbidder from South Australia, while multiple NSW-based groups made inspections throughout the campaign.
“There are a lot of buyers actively looking to be a part of the Geelong growth story.”
Prowse noted that near to the property are the headquarters of TAC, NDIS and WorkSafe along with Deakin University and Geelong train station, and it is opposite the $140 million Arts Centre and just metres from the Geelong Gallery that is earmarked for a $150 million upgrade.
Greater Geelong is one of Australia’s fastest-growing regions. with the population forecast to increase by 28.7% between 2024 and 2034. The City of Greater Geelong is now devising an economic and development plan that generate a further 55,000 new jobs in the region, increasing Gross Regional Product (GRP) by $9.7 billion by 2041 and attracting 120,000 people.
The city has had the highest growth across all three major economic indicators of GRP, jobs and employed residents compared to similar regions and cities across Australia. Greater Geelong has an estimated GRP of $15.4 billion, 120,000 local jobs and 19,600 businesses.
Darcy said that investors are showing strong interest highly accessible assets.
“The Geelong Ring Road and Princes Freeway just moments away from the property, providing connectivity to Melbourne, the Surf Coast and the entire southwest of Victoria.