Prized landholdings with development potential in Melbourne’s inner-eastern suburbs continue to attract premiums, with a High Street, Kew site the latest to change hands.
A local developer picked up the 526sqm concrete display yard at 226-232 High Street with an attractive Commercial 1 zoning for $4.5 million.
Chris James and David Bourke of Fitzroys negotiated the off-market transaction.
The site has a wide 15.4-metre frontage to High Street, in a central position in the Kew retail and commercial centre across from local icon Toscano’s, neighbouring Bank Australia and close to other major banks, supermarkets, specialty food and beverage offerings, and Kew Junction.
The site offered existing holding income from an outdoor advertising agreement of $30,600 per annum.
James said the purchaser has completed a number of successful developments across Melbourne and would look to utilise the site for a mixed-use project.
He said the ongoing introduction of medium and high-density residential developments and a growing office population in Melbourne’s inner eastern suburbs of Camberwell, Hawthorn and Kew had stimulated the retail precincts throughout the region, including Kew Junction, Glenferrie Road and Camberwell Junction.
“Kew, Hawthorn and Camberwell are proving particularly attractive to developers for boutique project opportunities, underpinned by strong demand due to the area’s retail and lifestyle offering, the presence of a number of Melbourne’s leading private schools and multiple public transport options.”
More than 2,000 apartments are currently in the pipeline through Melbourne’s inner-east.
A Mayston Street site in neighbouring Hawthorn East recently sold with a permit for 33 apartments and four townhouses, and major Chinese player Dahua Group has a 1,980sqm four-level mixed-use project with 345 apartments in its pipeline in the suburb.
According to Fitzroys’ Walk the Strip report, “Whilst the Victorian shop-and-dwelling that dominates many of our strip centres ensured the activation of mixed uses through these locations in the past, it is the more recent revolution of medium density mixed-use retail/ residential developments that has further accentuated the extended trading cycles of these centres and added to their vibrancy.”
With Melbourne commercial property sales activity maintaining its momentum late into 2017, agents GormanKelly have continued the trend, with a brilliant result in selling 115 Martin Street and 2B Hamilton Street, Brighton after only 3 years of new ownership.
Formerly Gardenvale, the property is situated within an area that has seen steady retail growth in the past few years due to the recent addition of mix use developments, according to GormanKelly Sales and Leasing Executive, Chris Alcock.
“The property was well received by a wide pool of buyers, most of them coming from GormanKelly’s buyer database,”Mr Alcock explained.
“Despite the property being passed in at auction, a great outcome was ultimately achieved for the vendor, which saw a 15% increase in the property’s value in a short period of time.”
This corner retail premises with a residential unit at the rear was marketed to owner-occupiers with further potential development upside, passive investors and professional developers.
The property sold for $2,475,000 on a yield of 2.74% - the rate achieved on land and low rental return were on par with better known and well regarded retail strips in Brighton such as Bay Street and Church Street.
The purchaser intends to hold the property as a short term investment with the view of adding another level to the building and eventually occupying the ground floor.