Why Geelong’s western suburbs are hitting the heights for buyers
The growing popularity and gentrification of the western suburb of Hamlyn Heights has underlined the potential of a key commercial property on Vines Road.
The commercial premises at Shops 1 and 2/63 Vines Road sold recently for $1.07 million.
The deal realised a 4.5 per cent yield for the seller.
Darcy Jarman, Geelong West agent Tim Darcy said the gentrification in the Herne Hill, Manifold Heights and Hamlyn Heights area had supported the strong result.
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Geelong sellers hit the jackpot
The existing tenants have been in place since the shops, on a corner property, were built about eight years ago, he said.
“The rents are pretty modest, so there was a number of local investors that were pretty keen to buy it,” Mr Darcy said.
Vines Road is home to the popular Vallis IGA supermarket. Owners are rebuilding after a fire at the opposite end of the shopping centre.
“It’s a good little vibrant area that is becoming more active as time evolves,” Mr Darcy said.
The local buyer was seeking a passive investment to add to their existing portfolio.
“It’s got a proven track record in the time it’s been in existence in an area that’s growing and thriving.”
The transaction was completed in the first week of January.
Mr Darcy said the pandemic had drawn a bigger focus on the region for commercial property investors.
“We’re very optimistic about the immediate to medium term future of Geelong in terms of activity,” he said.
“I think that we’ve already been in a relatively strong growth cycle.
“This pandemic has heightened the activity around Geelong and the Bellarine Peninsula and Surf Coast.
“So we’re dealing with a lot of pent up demand for a raft of different opportunities within the industrial and commercial sector within Geelong at the moment.”
Ice cream shop licked
That pent-up demand manifested itself in a battle for the home of Fruits of the Forest ice cream shop at Lorne.
Gartland Property, Geelong agent Michael De Stefano said a number of buyers jumped on the opportunity to purchase the 85sq m retail space at Shop 2/148-174 Mountjoy Parade.
It was offered for $850,000, but Mr De Stefano wouldn’t disclose the sale price, though with international travellers grounded, the Lorne property market had “skyrocketed”.
“They’ve got record prices at the moment and the commercial market hasn’t deviated from that trend,” he said.
“You’ve got to look that Mountjoy Parade has virtually zero vacancy.
“So with a lot of investments you’ve got to look at the strengths — with the loss of a tenant, can you replace them?
“That tenant has had a really strong background in Lorne and has been in that shop for over 30 years.”
Mr De Stefano said the sale generated a yield of about 5 per cent.
“I think there is going to be a fair bit of capital growth to come in Lorne over the next couple of years.
“My buy there was an astute investor and I think he’s bought well.”