This article is from the Australian Property Journal archive
LOWER interest rates are encouraging investors to go shopping for retail properties in Prahran.
Colliers International has sold three assets in quick succession in recent weeks.
The first sale was at 268 High St Prahran, a 130 sqm retail site, currently tenanted by Zimari Restaurant, was purchased by a private investor for $850,000. The restaurant currently sits below 68 one-and-two-bedroom apartments.
The second deal at 252 Chapel St Prahran, a 107 sqm retail investment site, currently tenanted by Tony Bianco, sold after auction for $2.25 million to an international investor on behalf of Roscon Developments.
And finally at 40 Errol St Prahran, a 480 sqm, three-year-old architecturally-designed office building in Prahran’s Hawksburn Village, purchased by a local owner-occupier for $2.5million only five days after the EOI campaign closed.
Investment services executive Ted Dwyer said investors are returning to strip retail in high-profile locations.
“Demand for high profile locations is driving purchasing decisions at the moment. We are seeing investors and owner-occupiers alike having greater confidence in locations that boast retail amenity and strong demand from tenants and purchasers.
“The sale of 268 High St demonstrated the high demand we are seeing for affordable commercial investments located in evolving retail precincts – in this case, the property benefits from its close proximity to Chapel St,” Dwyer said.
“40 Errol St Prahran is evidence that A-Grade office product is not only in strong demand but is attracting purchasers who are willing to pay a premium. National tenants are also in high demand from investors, with purchasers willing to pay top dollar to secure an income that is backed by a strong and well-known company,” he added.
Throughout the Errol St campaign, Ted Dwyer and colleague Ben Baines received more than 60 enquiries with approximately 20 parties inspecting.
Investment services executive Andrew Ryan said opportunities to secure properties in highly desirable suburbs such as Prahran were rare.
“With the cash rate being at record lows and continual interest rate cuts with another tipped for Cup Day, investment in real estate is more viable than ever and there are number of purchasers circling for commercial assets with strong tenancy profile,”
Ryan said 252 Chapel St which he sold with colleague Jeremy Gruzewski, represented a unique opportunity in the current climate.
“Prahran has long been seen as a tightly held area and opportunities such as this one rarely hit the market,” Ryan said. “Having a tenancy profile of a national retailer in these uncertain economic times is desirable, hence the strong yield of 4.8%.”
Property Review
