First Tests For Melbourne’s Prime Shopping Strip Market
Opportunities in two of Melbourne’s most iconic shopping strips present the first tests for the strip retail market in 2022.

In the first test of the market under auction conditions, Fitzroys’ Chris James and David Bourke are marketing the versatile 566 Burke Road, Camberwell, which is expected to attract investors, value-add players and owner-occupiers. It goes to auction on Thursday, 17 March at 1pm.

Expectations are of circa $7 million for the commanding 646sqm two-level building that is set to be vacated by NAB at the end of June.

“This is one of the most versatile opportunities offered in the prime of Burke Road, Camberwell in years, with its dual frontages and position opposite the Camberwell Fresh Food Market,” Bourke said.

The building comprises a large 474sqm ground floor retail and commercial showroom with high atrium ceiling to Burke Road frontage, and a first-floor mezzanine area with partitioned and open-plan offices, and staff amenities. It provides walk-through accommodation to Market Place, offering further activation to the major car park and Camberwell Central, Woolworths, Kmart, Officeworks, and Aldi, while the office space can be accessed via the main retail area and separately from Market Place.

The large 560sqm landholding has a commanding frontage of 12.9m to the prime of Burke Road and Camberwell Junction precinct, just metres from the Junction itself and with huge exposure to passing traffic. It also has a 14.2m frontage to Market Place, and Commercial 1 zoning offers extensive value-add and development opportunities.

“Investors will note the property’s ultra-prime location within one of the best-performing shopping strips in Melbourne throughout the COVID period,” Bourke said. According to Fitzroys’ latest Walk the Strip report, Burke Road demonstrated its resilience with vacancies coming down from 11.3% to 7.3%, marking the biggest reduction in vacancies across Melbourne’s iconic shopping strips.

In Brighton, Fitzroys’ Chris Kombi and Mark Talbot, in conjunction with Aston Commercial, are marketing the commanding, multi-tenanted 71-73 Church Street & Carpenter Street trophy asset in the absolute heart of the famous strip with expectations of in excess of $15 million.

The fully-leased heritage-style 990sqm building offers a diversified income stream from strong and secure lease covenants, headlined by global sportswear giant Nike, together with national footwear retailer Ecco, popular bakery Laurent, and office tenants White Fox and 2 Construct. Combined income from the five long-term leases is $705,886pa plus outgoings and GST.

“This is undoubtedly one of the best strip retail investment opportunities in Australia,” Kombi said.

“Income-producing, well-located bricks and mortar assets with long-term leases to quality tenants present among the most secure investments in the COVID-normal and low interest rate environment.

“Prime Melbourne shopping strip assets offer an investment prospect that is simply hard to beat. Church Street, Brighton is notoriously tightly held, and we’re expecting local, national and international interest for this opportunity.”

Only two properties have been sold along the strip since September 2019 - and both of them by Fitzroys. They were the NAB branch at 35 Church Street, which sold for $6.105 million at a 3.5% yield, while last year 13 Church Street, home to international retailer Oroton, sold for $6.07 million at 2.5%.

The 71-73 Church Street & Carpenter Street building is on a significant corner landholding of 931sqm boasting 66 metres of commanding frontage to Church Street and Carpenter Street.

“The property presents a blue-chip investment in the here and now. Astute investors and value-add players will note the asset is on an irreplaceable landholding that presents the best landbank opportunity seen on Church Street for some time,” Talbot said.

According to Walk the Strip, Church Street, Brighton again held the title for the lowest vacancies among Melbourne’s shopping strips, with an ultra-low rate of just 0.7%.

The Expressions of Interest campaign closes Wednesday, 30 March.

Camberwell Office Building Sells for $125m
ASX-listed Growthpoint Properties Australia has bought a recently developed Camberwell office building for $125 million.

Completed in 2020, the 10,200sqm building at 141 Camberwell Road has campus-style floor plates of 2,700sqm and is fully leased to tenants including Miele’s national headquarters, Cabrini Health and Siemens Healthineers, with a weighted average lease expiry (WALE) of nearly 7 years.

It sold on a yield of 4.71%.

Recent sales of new inner-suburban developments include Irongate buying a half stake in 510 Church Street, Cremorne from Alfasi Group for $130 million, while fund manager Centuria Capital bought the 101 Moray Street building in South Melbourne from Deague Group for $205.12 million.

More Build-to-Rent for Melbourne
Melbourne continues to emerge as Australia’s build-to-rent capital, with another major project planned for Alphington.

Non-bank lender Corsair Investment Management and developer Time & Place have partnered up to build a $500 million mixed-use project within the former Alphington paper mill site.

It will include around 600 apartments on a 20,660sqm site within a 16.5ha precinct that was bought from developer Guy Nelson for $48 million. The precinct will comprise 6 towers in total above 25,000sqm of retail, including a Coles supermarket, co-working office space and community facilities.

Estimates have around than 60% of Australia’s planned or under construction build-to-rent projects taking place in Melbourne. Built-to-rent apartments are retained by the developer and are typically leased to tenants on more flexible lease terms than traditional rentals, and offer a range of amenities for residents.

In recent weeks, Make Ventures bought the 1.41ha Toyota dealership site at 687 High Street, Preston for about $40 million for a build-to-rent project. The site that could support between 500 and 600 apartments and 5,000 to 6,000 sqm of retail and commercial space.

Hines also bought the 3,068sqm site at 36-58 Macaulay Road, North Melbourne for $30 million, with plans to develop a $230 million build-to-rent project comprising dual towers with around 220 apartments.

A number of Melbourne’s build-to-rent projects are slated for city edge locations such as Southbank, Docklands and next to the Queen Victoria Market, as well as inner suburbs including Brunswick, South Yarra, Kensington and Footscray.

Among the active developers in the sector are Mirvac, Macquarie Asset Management, Assemble, Gurner, Samma Property Group, Greystar and Oxford Properties.