church street
The asset on Church Street. Image supplied.
  • Sale price reflects a 3.8% yield
  • Strong diversified tenants including Nike
  • Church Street one of the most sought-after retail shopping strips in Australia

Arguably Australia’s most premier shopping strip has seen its most significant retail transaction in recent times with a multi-tenanted building on Church Street selling for $16.2 million.

71-73 Church Street and 36 Carpenter Street in Brighton were sold following an expression of interest campaign that generated interest from a variety of Australian investors.

The heritage-style 990sqm building is fully leased, is located on a 931 sqm corner landholding.

The tenants are highly diversified, including Nike, Ecco, bakery Lauren and office tenants 2 Construct and White Fox.

The high sale price reflects a 3.8% yield, and a high land rate of $17,363 per sqm and $16,480 per sqm as a building rate.

“This was undoubtedly one of the best strip retail investment opportunities we’ll see come to the market in 2022,” Mr Kombi said.

“Most of the enquiry came from passive investors attracted to the strong lease profile, significant passing income and excellent corner position within Melbourne’s strongest performing strip retail centre.”

“Investors consider income-producing, well-located bricks and mortar assets with long term leases to quality tenants to be among the most secure investments in the COVID normal and low interest rate environment. We’re also seeing more investors anticipating higher inflation and turning to commercial property in favour of having money sitting in the bank.”

Tightly held

Mr Kombi added that prime Melbourne shopping strip assets offer an investment opportunity that is hard to beat.

“As expected, this combination of factors was reflected in the national enquiry and hugely competitive offers we received,” he added.

This is just the third building to have sold along the strip since September 2019. The other two were the NAB branch at 35 Church Street and retailer Oroton at 13 Church Street. Both of these transactions were sold through Fitzroys.

“Church Street, Brighton serves one of Melbourne’s most prized catchments, which has maintained a strong demographic with high disposable income and a consistently high median house price, and is home to highly sought after private schools, sporting facilities and popular beach attractions,” Mr Gruzewksi said.

“Investors recognise that Melbourne’s shopping strips have demonstrated their resilience over the past two years, and none more so than Church Street, Brighton,” added Mr Talbot.

The latest Walk the Strip report released by Fitzroys revealed that Church Street has the lowest vacancies out of Melbourne’s shopping strips – the rate sits at just 0.7%.

The proportion of speciality tenants, such as Ecco and Nike, has increased over the past three years to 58%. This is the highest fashion and discretionary retail component of any shopping strip in Melbourne.

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