The enduring attraction of well-located, securely-leased assets in Melbourne’s shopping strips has again been demonstrated, with a freehold leased to the Commonwealth Bank of Australia selling for more than $5.1 million after a competitive Expressions of Interest campaign.
The historic campaign attracted multiple offers and marked the first time the property changed hands in more than 50 years.
“Prime sites in Melbourne’s established shopping strips continue to be highly sought-after. Properties in this section Upper Heidelberg Road are rarely offered to the market, and national and international investors and land bankers recognised this was a genuine generational opportunity,” Kombi said.
“Interest rates are at an historic low and the share market continues to be volatile. Investors are seeking income-producing assets with secure leases to a blue-chip tenant, primely located within an established and affluent catchments.”
The dual-fronted property comprises a 350sqm two-storey brick building, leased to CBA on a 7-year lease plus options over the 230sqm ground-floor retail space. The CBA moved from within the strip three years ago to the property, combining the two existing shops in the building and completely renovating the premises to suit its modern open-plan layout.
Earlier this year, Fitzroys sold the Burke Road, Camberwell home of the Commonwealth Bank for $12.06 million, at a 3.5% yield.
Zoned Commercial 1, the land-rich Upper Heidelberg Road property encompasses a large 755sqm site with a prominent street frontage of 10.4 metres to Upper Heidelberg Road, along with rear frontage to a right of way and Ivanhoe Plaza car park.
Situated adjacent to a busy pedestrian crossing, the property is surrounded by national tenants and Ivanhoe Plaza, anchored by Woolworths and Liquorland, with constant pedestrian traffic from a prized established and affluent demographic.
James said more people working from home and shopping locally is a trend that is likely to persist in the long-term.
“People have been reconnecting with their local communities. At the centre of those are Melbourne’s shopping strips,” he said.
“Upper Heidelberg Road, Ivanhoe is considered one of Melbourne's safest retail precincts for commercial property investors, with an excellent track record of very low vacancy rates.”
Fitzroys’ Walk the Strip report series has consistently recorded Upper Heidelberg Road among the tightest vacancy rates of Melbourne’s shopping strips over recent years.