Melbourne auctions: ‘Covid-proof’ Ashburton retail site sells $1m above reserve
A “Covid-proof” investment in Melbourne’s southeast has smashed its reserve by seven figures in a nailbiting hour-long online auction.
The 550sq m retail outlet at 382-384 Warrigal Rd, Ashburton, which is tenanted by an Indian grocery store, soared $1m above reserve to fetch $3.201m.
The sale to a local investor came after the property was listed for the first time in two decades.
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The retail outlet at 382-384 Warrigal Rd, Ashburton, was snapped up for $3.201m under the virtual hammer.
It’s considered a “Covid-safe” investment because the Indian grocer is classed as an essential business.
The tenant has five more years on their lease.
Ray White Commercial agent Theo Karkanis said the sale showed investor activity was strong despite Victoria’s lockdown.
The site attracted 75 inquiries, with interest coming from a Singapore-based investor plus interstate and local buyers – including customers of the store and the tenant, who made an offer prior to the property hitting the market.
Mr Karkanis said 10 bidders ultimately competed for the keys.
The meal preparation area.
The kitchen would suit a restaurant or cafe-type business.
The fact the tenant was an essential business and hadn’t been closed during the pandemic was a big drawcard for those looking for a safe investment, Mr Karkanis said.
It was also in a prime location close to public transport and near a Woolworths, a KFC, and other big businesses, he said.
“There’s no Covid rent relief for them, no shut downs, he’s Covid proof,” Mr Karkanis said.
“These guys are paying full rent and I think that was a big factor.”
The auction went for 56 minutes and the tenant ended up bidding $750,000 more under the hammer than their initial offer amount.
The tenant was one of 10 bidders who competed for the property.
Mr Karkanis said the result proved it paid to take a property to the market even if the vendor received an enticing off-market offer.
If they didn’t, he said they risked “leaving money on the table” by failing to entertain bids from other buyers.
“I get why people think it’s a good idea to save on marketing and agents fees, but this is a good example of why it’s not a good idea (to sell off market),” Mr Karkanis said.
“(Taking it to the market) is like an insurance policy to ensure you’re getting the maximum value.”
Lots of storage for stock.
Investor activity also remains strong in regional Victoria, where the home of an ANZ bank branch in central Shepparton was snapped up $1.32m above reserve last month.
The two-level, 587sq m building at 261-267 Wyndham St sold through Fitzroys for $3.47m.
It had undergone a $1.5m refurbishment in 2019 to modernise the internal fit out.
More than 100 inquiries were made for the property.
The ANZ bank branch at 261-267 Wyndham St, Shepparton, also sold $1.32m above reserve.
Fitzroy’s director Mark Talbot said it “ticked all the boxes of a secure commercial investment” due to its location and long-term lease to ANZ.
Melbourne buyers were flocking to regional Victoria in search of investment opportunities due to a lack of stock in metropolitan areas, he said.
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