Stamp duty discount draw Melbourne investors to Geelong commercial real estate
Incentives to entice investors to buy commercial properties in regional Victoria is bearing fruit as potential purchasers sniff around opportunities in the new year.
Two retail properties in Geelong West and East Geelong were snapped up in February after spending months on the market in 2020.
Ray White, Highton agent Sean O’Brien said interest in the Ryrie Street cafe and Church Street shopfront lifted markedly around the new year when the 50 per cent stamp duty saving on regional commercial and industrial properties was introduced.
The State Government brought forward the stamp duty waivers for commercial properties in regional Victoria in its 2020 budget, with an aim of supporting businesses to open, relocate or expand.
A 20 per cent reduction was first announced in response to the devastating bushfires that ravaged regional Victoria for properties transacted after July 1, 2020, with the concession scheduled to increase by 10 per cent each financial year until 2023.
The measures brought forward the 50 per cent discount to contracts entered into on, or after, January 1, 2021, and included the regional cities of Geelong, Ballarat and Bendigo.
Mr O’Brien said Melbourne-based investors had snapped up the properties in deals signed in February.
At 19 Church Street, Geelong West, a retail shopfront sold for $800,000.
“Officially there are two tenant sin there — it all had separate meters for water, gas and electricity,” he said.
“The tenants in there paying about $46,000 a year.”
The property had been on the market for about 200 days before the sale, he said.
“Interest really flared up late last year and then buyers substantially came out of the woodwork from January 1.”
It was a similar story at 404 Ryrie Street, East Geelong, where cafe chain Two Sugars took up the $50,000 per year lease.
The business holds a new five-year lease with ongoing options for the 133sq m building opposite Geelong High School, which sold for $497,500.
Mr O’Brien said commercial investments provided less ongoing headaches for buyers, as tenants paid all outgoings on properties.
“In my opinion the commercial tenancy will become more of a player for an investors. They’re getting better returns and there is less rigmarole and less jargon to walk around with all the new tenants rights for residential properties,” he said.