Investors have recognised the resilience of Melbourne’s shopping strips in bold fashion, with the remarkable $6.788 million auction sale of a prime Burke Road, Camberwell asset - $1 million above the reserve, and at a sharp 3.8% yield.
The commanding, dual-fronted 344sqm freehold is located in the heart of the famous shopping strip, on a 361sqm site zoned Commercial 1, and with two genuine street frontages to both Burke Road and Market Place.
Highly-successful national apparel tenant Witchery, part of Country Road Group, has a long lease over the property that it recently extended.
Multiple bidders competed at the auction following a campaign that generated strong local and international enquiry, and a local investor emerged successful as Melbourne’s retail and commercial property market passed another test.
“This result shows the market has undoubtedly recognised the resilience shown by Melbourne’s shopping strips over the past 12 months,” Kombi said.
“The security of well-located bricks and mortar assets with quality leases has become even more highly sought-after during the COVID period, as well as in the ultra-low interest rate environment.
“Investors continue to identify well-located Melbourne retail and commercial property with strong tenancy profiles and long-term leases as ideal assets.
“The depth of enquiry again showed there is a large volume of capital waiting to be deployed, after few high-quality properties were offered for sale over the past 12 months. We expect more investors will be seeking these types of opportunities in 2021.”
The property is just metres away from 751-753 Burke Road, home to national retailer Mountfords Shoes on a long-term lease, which Fitzroys sold for $7.55 million at a sharp 4.1% yield in the first auction of a prime Melbourne shopping strip asset in 2021.
“These results are a strong indication that investor confidence in retail property is returning to pre-COVID levels, with both shops leased to tenants selling items of a non-essential, discretional nature (fashion and footwear respectively).”
“The results also reaffirm Burke Road, Camberwell’s status as one of Melbourne’s most valuable and best-performing retail and lifestyle precincts,” James said.
“Local neighbourhood strips have been the place for Melburnians to reconnect with their local communities. Burke Road, Camberwell has been ideally placed to weather the COVID period, with its quality tenancy mix of local and national traders, cafés and restaurants attracting visitors looking to have a coffee, catch-up with friends, or to break up the day and go shopping, particularly as working from home becomes more widely practiced.
“Further, the property is in a highly accessible position that enhances its connection to the prized affluent and established catchment that Burke Road and the Camberwell Junction precinct serve.”
James said the catchment has been further enhanced by new medium and high-density residential and commercial developments such as Camberwell Village, Hawthorn Park, Aerial, The Well Residences, Elmington, Solstice and Ebony.
Showing confidence in the location, Witchery extended the lease last year. It has activated the open plan ground floor retail area to both frontages, providing a clear walk through from Burke Road to Market Place. The frontage to Market Place provides additional activation to the major car park, Camberwell Fresh Food Market and a bustling hospitality precinct.
Fitzroys also recently sold the Ambulance Victoria station at 612-616 Camberwell Road, Camberwell for $3.6 million at a sharp 3.8% yield. Over recent weeks, Fitzroys has sold around $18 million worth of property in the suburb at an average yield of sub-4%.