An interstate investor seeking a high-yielding asset in a regional Victoria location has backed the Geelong boom and bought a strata health and wellness asset in another strong CBD sale result.
Fitzroys Chris Kombi and Lewis Waddell, in conjunction with Andrew Prowse and Tim Darcy of Darcy Jarman, sold the 396sqm strata-titled asset at 46 Ryrie Street for $2.78 million.
Located in the heart of the Geelong CBD, close to the flourishing medical, arts and hospitality precincts, the property has a 31m corner frontage and 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.
It was offered with a 10-year lease plus options to wellness and fitness tenant Sweatshop.
“The purchaser was attracted to the stamp duty concessions along with the higher yield that typically comes with regional Victoria assets compared to metropolitan locations,” Waddell said.
“They also liked the fact that land tax is low for strata properties compared to freehold assets of this size.”
“There are a lot of investors looking at regional locations with high growth prospects for higher-yielding opportunities with lower land tax obligations and lower risk,” Waddell said.
Kombi said buyers were also attracted to the booming CBD location with huge growth prospects, and the tenancy profile of a successful multi-location fitness operator that is likely to trade well as the residential population grows.
“We continue to see investors in large numbers seek security in well-located assets with long leases to health and wellness operators,” he said.
Fitzroys and Darcy Jarman recently sold 36 Ryrie Street – another health and wellness strata asset part of the same building – for $1.59 million, on a 5.6% net yield; as well as the Siles Health property also in the Geelong CBD to a Melbourne-based investor for $2.005 million, on a 5.8% yield.
“Local, Melbourne and interstate groups are all seeking to be a part of the Geelong growth story and are prominent in our campaigns,” Kombi added.
One of Australia’s fastest-growing regions, Greater Geelong’s population is forecast to increase by 28.7% between 2024 and 2034. The City of Greater Geelong is devising an economic and development plan to 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.