First-time investors chase strip retail properties in portfolio sale

First-time investors in commercial property are showing their interest in 16 strip retail assets accrued by late businessman Harry Oviss, which are being sold by Fitzroys in a portfolio auction.

With many of the properties offering long leases with well-established tenants and even 5% annual rent increases for some, the portfolio is attracting interest from those looking to park their capital in safer investments as interest rates rise, according to Fitzroys’ Mark Talbot who is marketing the assets along with Tom Fisher and Chris Kombi.

“We’ve already received interest from a wide range of investors, from entry-level and first-time market participants to self-managed super fund buyers and more seasoned investors, all looking for secure long-term investments amid sharemarket and residential market volatility,” Mr Talbot said.

“Well-located commercial property with long-term leases and sizeable annual increases like these are considered to present a more secure investment and safer place to put money
in the current climate, even with further interest rate rises expected.”

The 16 properties are located in local shopping strips in 10 Melbourne suburbs including Cremorne, Hampton, Sunshine, Carnegie,  St Albans, Caufield, Preston and Mt Eliza.

Each property is being offered as a freehold and will be sold separately with Fitzroys anticipating the total value of the entire portfolio to be around $23 million.

The June 23 auction is the latest group of retail strip shops to be sold by the Oviss family.

Mr Oviss, who died in 2021, was a well-known businessman and commercial property investor in Melbourne. He is best remembered for operating a knitwear store in the Block Arcade which he opened when he was just 19.

Work from home encourages more to shop local

Buyers are willing to invest in local shopping strips as the pandemic shift to working from home has meant Melburnians now shop locally more often, Mr Kombi said.

“The COVID period has reinforced their role as a place for Melburnians to connect with their local communities. Our ‘local village’ became something more than a place to run errands
and do the shopping – it was the place to get a coffee, meet friends for a walk, or to break up the day while we were all working from home,” he said.

Fitzroys has sold a number of retail assets in well-established Melbourne shopping strips this year, including a building in Brighton’s Church Street that sold for $16.2 million on a blended yield of 3.8% and another in Burke Road in Camberwell that sold for $6.6 million.