Not to be outbid by Asian investors, local investors are reasserting their presence in the Melbourne CBD and city fringe, according to Colliers agent Daniel Wolman says.
Prime CBD retail assets, and those in nearby tightly held city fringe retail strips, were in “hot” demand amid Colliers International’s Winter 2013 national auction portfolio.
Achieving an outstanding yield of 3.48% was a freestanding Victorian-style building at 776 Glenferrie Road in Hawthorn which had not changed hands for more than five decades.
Tenanted by Rhodes Hair Studio, the fringe retail strip offering sold under the hammer for $1.78 million through Daniel Wolman and his colleague Jeremy Gruzewski.
“The tenant, Rhodes Hair Studio, has resided in this building for more than 25 years,” Mr Wolman said.
“Hawthorn, and particularly the Glenferrie Road precinct, is tightly held and always in high demand from investors and tenants alike, but even we were amazed by the yield we were able to achieve,” he said.
Mr Wolman and colleague Matthew Stagg sold an Australia Post outlet at 839 Bourke Street in the Victoria Harbour precinct in Docklands for $902,000 along with the Brown Gouge dry cleaners premises at 837 Bourke Street, for $545,000.
The consecutive auctions attracted seven bidders.
“With lower interest rates, finance for investors is becoming much quicker and simpler to access,” Mr Wolman said.
“Banks and investors want to see a secure lease to well-established tenants, and there have been some strong examples of late.
“Local investors are getting back into the market in a big way, and properties in prime locations are at the top of their wish list.
“Last year the activity was primarily drive by Asian investors,” he added.
“The influx of Asian capital targeting Melbourne CBD commercial property, and the ease with which purchasers can enter the market via their self-managed super funds, contributed to a noticeable increase in sales last year.
“But to date, 2013 has been all about the domestic purchaser.”
This article first appeared on Property Observer.