This article is from the Australian Property Journal archive
A FULLY leased corner investment in Kew Junction has sold for the first time in three decade and eclipsed expectations with a $12.8 million sale price on a 2.5% yield.
The single storey 1,296sqm building sits on a 1,570sqm site at 4-14 Walpole Street in Kew, with nine fully occupied shops, a rooftop car park with 46 spaces and extensive double frontage.
David Bourke, Chris James and Ben Liu from Fitzroys sold the property via an expressions of interest campaign that generated 12 completive offers, before selling to a land banking private investor far above the circa $10 million expectation.
“This was an ultra-rare opportunity to secure a landmark property in a blue-ribbon suburb with excellent landbanking attributes, and the purchaser can now enjoy an established cash flow and rental upside, and assess the considerable future redevelopment potential,” said Bourke.
“It was an incredibly competitive expressions of interest campaign, which was another excellent demonstration of the strength of Melbourne’s commercial real estate market at the moment.”
Retail tenants at the site include Jade Kew Restaurant, Buoy Pizza, Beejans Bakery Café, LivFit Physio Kew and Skin & Brows, with leases ranging from three to five years plus options.
The Commercial 1 zoned property includes 47.74 metres of frontage to Walpole Street and 33.15 metres to Walton Street, sitting opposite a Woolworths and within close proximity to the corner of High Street.
“Campaigns for quality properties with strong investment and land banking attributes are attracting huge interest – there was more than $125 million of active capital left out on the table in this campaign,” added Bourke.
“Despite the interest rate rises over the last 12 months we continue to see competition for quality assets, and strong results and sharp yields.”
The site is also located within the Kew Junction Activity Centre, with Design and Development Overlay 14 DDO14 allowing a building height of up to 18 metres (STPA) and uses including retail, residential, commercial and mixed-use.
“Kew is serviced by all major trading banks, major supermarkets including Woolworths and local favourite Leo’s Fine Food & Wine, together with a host of recognised businesses including Chemist Warehouse, Flight Centre, Woodfrog Bakery, Endota Spa, Toscano’s and Bob Stewart, plus a wonderful food and beverage offering and also had a strong commercial office base,” said James.
Kew is well-serviced by public transport, with Route 48 and 109 trams and multiple bus routes providing access to the CBD and wider metropolitan Melbourne, in addition to several main arterial roads nearby including the Eastern Freeway CityLink.
“We continue to receive strong engagement across our marketing campaigns from investors backed by Asian capital who are looking to secure well located assets with development upside and this sector was well represented in this campaign,” concluded Liu.
