The commercial property market continues to show huge interest in the Mornington Peninsula, with a strata retail freehold selling for $2.62 million under the hammer, at a very sharp 3.3% yield.
Fitzroys’ Tom Fisher and David Bourke sold 125 Main Street, Mornington to a local investor.
Six bidders - locals and from greater Melbourne - competed at the fiercely contested auction, pushing the price well beyond the reserve for the 164sqm property. It is securely leased to established tenant Home in the Hamptons on a 5+5-year term.
Located in the heart of the main commercial and retail hub, the property has a commanding corner frontage of over 10 metres to Main Street and direct access from a large public car park at the rear.
“We’ve seen a huge spike in interest from investors in the Mornington Peninsula over the past few years,” Fisher said.
“It’s widely considered a surging coastal location. The depth of the enquiry and bidding on auction day shows just how competitive the Mornington market’s become.
“Coastal locations have been busy over the past two years. They’ve attracted people looking for a change of scenery, enabled further by flexible working arrangements, as well as a huge share of Australians’ tourism spend.”
In a display of the strength of Mornington, Fitzroys had brokered the long term lease to Home in the Hamptons at the property in August of 2020, in the heart of the COVID period.
“This property has been a bellwether of the resilience of Mornington’s Main Street strip. It was leased on a long-term deal in the heart of COVID and it’s now sold on an extremely tight yield.”
The property is surrounded by a plethora of national and local traders including Coles, Woolworths, Country Road, Cotton On, Bed Bath ’N’ Table, Sportsgirl, Gazman, NAB, Westpac, ANZ and more.
Fisher said the yield achieved was extremely tight for a strata-titled investment.
“Strata-titled commercial properties have become a favourite of investors looking to shore up their income stream in the COVID-normal and ultra-low interest rate environment, and amid volatility in the stock market,” he said.
“Well-leased, well-located strata-titled assets tick all the boxes. They typically offer an easier management proposition as an owners corporation oversees maintenance, and low land tax liabilities don’t cut into the return.”