- Melbourne is now the city that has spent the most time in lockdown since the pandemic began
- A Chapel Street corner site sold for almost $4M via an online auction
- Demand for retail and food vendor sites still high
Despite the extended lockdown in Melbourne – which has overtaken the Argentinian capital city of Buenos Aires as the city with the most cumulative time in lockdown – sales and leases of commercial property continue to perform strongly,
Local property agency Fitzroys has reported a varied portfolio of sales and leases across Melbourne ranging from corner sites on the famous Chapel Street to Melbourne’s CBD – despite the working from home phenomenon.
Chapel Street site sold online
A corner site on the famous Chapel Street in Prahan was sold at a recent auction for $3.84 million, at a 2.3% yield.
The sale was facilitated by Fitzroy’s Mark Talbot and David Bourke, with the latter overseeing the online auction from his home with 100 enquiries.
It is the first time the property has been on the market for half a century.
Mr Talbot added the successful auction of the site – zoned Commercial 1 – confirms buyers aren’t deterred by the online process.
“High-quality assets have been in short supply on the market over the past 18 months, and there is a huge volume of capital waiting to be deployed across the market. Buyers simply aren’t being deterred by the online auction process, or a change in sales method during a campaign,” he said.
“The transparency of the auction process is maintained, while significant results achieved recently have encourage vendors to proceed with their campaigns.
Mark Talbot, Fitzroys
“Together with technological and logistical advances seen over the past 18 months alone, all parties are much more confident in proceeding with auctions and achieving a strong result.”
50% of shopping strip leases for food vendors
Fitzroys has revealed that around 50% of leases they have facilitated along Melbourne shopping strips have been to food and beverage operators – well above the 28.4% average.
“Hospitality operators have been snapping up small spaces for lease that allow them to quickly expand and establish themselves in new markets,” said Fitzroy’s Tom Fisher.
The news comes as Fitzroys negotiated a 5 + 5 year lease along Church Street in Brighton for boutique caterer Blakes Feast.
The caterer launched Blakeaway last year during Melbourne’s first lockdown for takeaway meals, with demand for such services increasing due to Melbourne’s intermittent lockdowns.
“The huge shift in enquiry and leasing deals towards food and beverage operators seen with the arrival of COVID has continued through 2021,” added Mr Fisher.
Collins Street is calling
Collins Street, located in the heart of Melbourne’s CBD, is also continuing to witnessing strong leasing activity.
243 Collins Street has been leased to jewellers Artelia on a long 7 + 5 year term. Rents in the area are typically around $2,500 per square metre – despite less activity in the CBD.
Nearby at 460 Collins Street (main photo), Fitzroy is currently marketing an Art Deco space over two levels. The space includes heritage features from its heyday as a 1930s bank chamber.
Famous Camberwell retailer sold
The building housing Cavalier, the longest-running shop on Burke Road, Camberwell, was sold via an online auction last month for $4.39 million at a 2.6% yield.
The retailer, whose famous clientele included Bert Newton, has performed well during the pandemic, so much so that it has signed up to a 5 + 5 year lease.
“There is huge pent-up demand that has built over the past 18 months, due to a lack of high quality commercial property investment opportunities coming to the market,” Mr Bourke noted.
“The large volume of capital in the market simply isn’t being deterred by COVID interruptions. We’re consistently seeing results push new benchmarks.”
David Bourke, Fitzroys