Geelong offices tipped to provide strong returns
Two commercial tenancies in a landmark building at the entrance to Geelong’s CBD are expected to generate strong yields.
The tenanted investment at 1 and 2b/2-4 Mercer Street, Geelong are being auctioned this Friday at noon.
Maxwell Collins, Geelong agent Don Hough said price hopes are from $960,000 to $1.05m.
He said the sale is anticipated to net a yield of 4 to 5 per cent for investors.
The tenancies represent the commercial elements of the old Bayview Hotel, which has two floors of residential apartments above.
“That area of Geelong, particularly with the high-rise developments and the expectation that it be a key entry point into the CBD makes this a desirable property,” he said.
“We are looking to auction the commercial part of the property, which is the current ground floor and the rear two-level office.
“We have two separate tenancies in the building, being sold as one.
“The income being generated by the tenants on the long leases are totalling $48,000 a year plus GST plus the outgoings.”
Mr Hough said interest has been strong.
“It’s been recognised that in the Geelong market at auctions recently that the yields have been very strong and we’ve priced this property at around the high 4-5 per cent market on return on investment.
“In the current market where interest rates are at the moment, that represents a very strong investment opportunity.
“I can only see that this area is improving, because not only where it’s positioned but people can walk across the pedestrian bridge to the Pakington Street shops or down to the waterfront and back into the CBD, so it’s a great spot from a location point of view.”
The property will be auctioned on April 30 at noon.