Ocean Grove chemist obliterates reserve price
The carrot of a strong long-term commercial yield for a retail asset drove a bidding war between investors for a property hosting an Ocean Grove chemist.
The 327sqm single-level building at 76A The Terrace, Ocean Grove, sold at auction for $2.465 million at a 4.1% yield.
Fitzroys agent Mark Talbot and James Lockwood sold the freehold property leased to the Pharmasave chemist after receiving more than 100 inquiries which led to spirited bidding between multiple parties.
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An interstate investor secured the property in the sale that was $565,000 above the reserve price.
The long-term tenant is on a two-year lease with a further two four-year options dating from July 2017.
The property has a prominent frontage of more than 10m to The Terrace and is opposite the Coles supermarket and next to a property earmarked for a town square redevelopment under a council design framework for the town centre.
Talbot says the result shows that tight yields of this nature for retail and commercial strata assets once only seen in Melbourne’s inner suburbs can be achieved outside of the capital city.
“Strong sales results have been spreading through the edges of metropolitan Melbourne across the bay recently, but this is a landmark result beyond the suburban boundary, nearly 100km from the CBD,” he said.
Lockwood says the sale is significant because investors will often overlook commercial properties in coastal locations.
The Terrace shopping centre has a strong mix of national and local traders, including Coles, Target and major banks.
This article from the Geelong Advertiser first appeared as “Ocean Grove chemist smashes reserve price by $565,000”.