Chapel Street Sale 170 Years in the Making
A strong sale result 170 years in the making has been achieved on Chapel Street, after a campaign that saw investors, developers and value-add buyers show their faith in the future of the famous shopping strip.
Fitzroys Lewis Waddell and David Bourke, in conjunction with Peter Lane of Lane Commercial, sold 259-261 Chapel Street, Prahran on a tight 4.9% yield.
The property was sold on behalf of the historic Prahran Mechanics Institute, now known as the PMI Victorian History Library Inc., who had owned the property since the 1850s.
Some 70 enquiries were generated during the campaign. The purchaser is a local buyer looking to hold the property long-term and take advantage of future rental upside.
On 366sqm with Activity Centre zoning, the property features a 15m street frontage to the major shopping strip, and is leased to 3 tenants in underwear, swimwear and sportswear retailer DailyJocks, Connection Perfumes + Gifts, and Bennett’s boxing gym.
“Buyers recognised this as a genuine never-before-offered chance for them to make their mark on Chapel Street,” Waddell said.
“The offering presented a fully-leased dominant building with 3 income streams, a dominant frontage, and future development potential given the size of the site and rear access.
“Investors, developers and value-add buyers all showed interest in big numbers, in a great show of faith in the future of Australia’s most famous high street.
“In our ongoing dialogue with buyers throughout the campaign, the feedback we consistently received is that Chapel Street has a huge future ahead.
“Buyers with a long-term view are seeing value in Chapel Street given the massive influx of investment in and around the strip, translating into excellent prospects for rental growth.
“Chapel Street is undergoing a generational period of revitalisation. We’re seeing an incredible number of precinct-shaping developments take place, which will bring thousands of residents and workers to the immediacy of the strip, driving trade and activity at all hours,” Waddell added.
Bourke noted myriad projects on and around Chapel Street are in motion, headlined by Gurner and Qualitas’ $5 billion Jam Factory redevelopment, which will deliver more than 800 apartments, luxury hotels, and 20,000sqm of retail and commercial space across five towers, with the popular cinema to be retained.
Bill McNee’s Vicland recently acquired 402-416 Chapel Street for $65 million and has just had expanded plans for a now 13-level retail and commercial building approved, while closer to the 259-261 Chapel Street property Mario Lo Giudice’s Banco Group will soon open the Cecil Place Precinct at the former Union Bank of Australia building, bringing a new retail, hospitality and office offering.
Lane added that the Victorian Government’s newly designated Activity Centres include Chapel Street and the immediate surrounds, further encouraging high-density development in the immediate surrounds. This section of Chapel Street is already home to a number of high-quality businesses that drive pedestrian traffic throughout the day and into the night, including the new JB Hi-Fi, Dan Murphy’s, Rebel Sport, Coles, Lululemon, and more.
The vendor of 259-261 Chapel Street was established as the Prahran Mechanics’ Institute in 1854. It is a community-owned and run library, specialising in the history of Victoria and which has become a central resource for research into the state’s history.
The library, based in St Edmonds Road, Prahran, has over 70,000 items for loan, many of which are exclusive. It also provides a professional information service for members and organises educational activities including lectures, seminars and competitions to encourage and facilitate the study of history.