Despite sales campaigns being interrupted by COVID-19, well-located retail properties across Melbourne with secure leases to quality tenants have continued to attract investors and achieve strong sales results.
Fitzroys’ Mark Talbot and Chris Kombi sold 439 Keilor Road, Niddrie for $1.4 million at a tight 4.25% net yield to a self-managed super fund investor following a campaign that generated more than 130 enquiries.
Zoned Commercial 1, the fully refurbished building is on a site of 209sqm and includes off-street parking.
The property is leased to major tenant Ferguson Plarre Bakehouses on a secure 6+6-year term. The bakery and cake maker has more than 70 stores across Victoria.
“With our marketing campaign interrupted by COVID-19 and the auction cancelled, the sale of this property took a little longer than expected considering its prime retail location and secure lease to a quality tenant in Ferguson Plarre,” Kombi said.
“Despite the tenant only offering take away food and coffee at the moment, investors again showed they are taking a long-term view. The huge volume of enquiry also reflected faith in the tenant and the property’s location.”
Talbot said the enquiry for 439 Keilor Road ranged from self-managed super fund investors to more experienced market participants.
“Buyers are displaying confidence in the long-term prospects of the Melbourne retail and commercial property market, which presents reliable income-producing opportunities amid a historically low interest rate environment and share market volatility.
“SMSF investors have become prominent throughout the market in recent times for this reason.”
Situated in the prime of the Keilor Road retail and lifestyle precinct, the property offers excellent access to a large public car park at the rear via the adjoining Shopping Place arcade. Keilor Road boasts an excellent tenancy mix including major supermarkets, banks, national retailers, established food and beverage operators and boutique apparel groups.
The area is well serviced by public transport with the Route 59 tram operating along Keilor Road, and road connectivity is also available with easy access to the Calder Freeway and Tullamarine Freeway just moments away.
Talbot said the demographic profile of Niddrie continues to change, with Keilor Road witnessing the development of several sites into ground floor retail and high rise residential complexes further adding to population growth and foot traffic in the shopping precinct.
Talbot and Kombi sold the property on behalf of a private family which has held the property for over 30 years.
Fitzroys has sold multiple securely-leased cafe and hospitality-leased retail properties amid the COVID-19 uncertainty. They include the corner premises of Bicycle Thieves at 449 High Street, Northcote for $2 million at a 5% yield, and a neighbourhood café investment at 122 Highfield Road, Camberwell, home to Dish & Spoon, for $1.3 million at 4.4%.