Melbourne retail property market continues bull run: CBRE
Melbourne’s commercial property market continues to its strong run, with a tranche of sales in the lead-up to the end of the year.
Highlighting the trend, a ground floor retail shop in the heart of Brighton’s restaurant and retail precinct recently sold for $1.9 million.
Located at 370 Bay Street, the 233 square metre ground floor retail shop (above) is securely leased to food retailer Burger Edge.
It provides an annual income of about $50,000 per annum with short-term upside.
The selling agent was CBRE’s Rorey James.
“This result is yet another example of the strong market confidence towards well located strip retail properties, which is being further enhanced by the low interest rate environment, improved consumer sentiment and upturn in business confidence,” James said.
In further evidence of the uptick in sales activity, an owner-occupier recently secured a retail presence in North Balwyn for $700,000.
Shop 3, 74 Doncaster Road is a 62 square metre retail property in the heart of Balwyn North Shopping Village.
CBRE’s Sandro Peluso brokered the deal.
“The building rate was equivalent to more than $11,000 per sqm, indicating the strength of demand shown by these owner occupiers looking to secure retail space in Melbourne’s eastern suburbs,” Peluso said.
The two transactions follow a recent sale of a Richmond development site for $16.7 million, on a tight yield of 1.5%.
Situated at 79-89 Swan Street, the 1,540 square metre site comprises a 2,057 square metre two-storey building that has 10 shops and eight office suites with shared amenities.
The property was sold through auction after an initial Expression of Interest sale process.
Seven bidders drove the price more than $4.2 million above reserve to the final bid of $16.7 million – a rate of just under $11,000 per square.
“In a trend that is continuing to gain more traction in 2015, the property was sold to a local buyer, who managed to outbid several activity offshore and local groups,” CBRE director Mark Wizel said.
