Brighton retail property sells for $16.2m as suburban assets rebound

The sale of two Melbourne retail properties highlights the appetite among buyers for assets in local shopping strips that have performed well during the pandemic.

A heritage-style 990sqm building in Church and Carpenter streets in Brighton which houses high-end tenants including Nike, footwear retailer Ecco, bakery Laurent and office tenants White Fox and 2 Construct has sold for $16.2 million.

The multi-tenanted building, which went to market with price expectations over $15 million, was sold on a blended yield of 3.8% according to selling agents Chris Kombi and Mark Talbot from Fitzroys and Jeremy Gruzewski and Liam Rafferty from Aston Commercial.

This property is the third retail asset in the tightly-held shopping string to come to market since September 2019.

The strip’s strong performance combined with its low vacancy rate of 0.7% and the strong lease profile of the tenants attracted a range of passive investors seeking solid returns.

“Investors consider income-producing, well-located bricks and mortar assets with long-term leases to quality tenants to be among the most secure investments in the COVID-normal and low interest rate environment,” Mr Kombi said.

With many workers across Melbourne now working from home for at least part of the week, suburban retail strips represent a more solid investment and the Brighton property is located in one of Melbourne’s most prized catchments, Mr Talbot said.

“Investors recognise that Melbourne’s shopping strips have demonstrated their resilience over the past two years, and none more so than Church Street, Brighton,” he said.

This Camberwell retail property sold for $6.6 million to a local investor. Picture: realcommercail.com.au/sold

In Camberwell, this Burke road property [currently a NAB branch] that had been tipped to sell for over $7 million sold for $6.6 million to a local investor who will reposition the property.

The current tenant will vacate the 646sqm property in June, but the sale attracted more than 100 enquiries according to selling agents Chris James and David Bourke from Fitzroys.

“Investors were keen to secure a freehold in one of Melbourne’s best-performing strips throughout the COVID period, while owner-occupiers saw an incredible opportunity to secure an ultra-prime flagship Melbourne shopping strip premises,” Mr Bourke said.

The sale is a sign that Melbourne’s suburban retail assets remain attractive with investors due to the shift in working from home and more people shopping locally more often.

“Prime Melbourne shopping strips assets continue to be regarded as compelling opportunities. There’s clearly pent-up demand and large volumes of capital waiting to be deployed in the market after low levels of quality stock came to the market over the past two years,” he said.

Four adjoining freehold properties at 587-593 Chapel St, South Yarra also sold for $5.825 million to a local investor on a yield of 2.9%, in a deal handled by Fitzroys’ Mark Talbot and Mr Bourke.