Church Street, Brighton has seen its most significant retail investment transaction in years, with the $16.2 million sale of a commanding, multi-tenanted building in the absolute heart of arguably Australia’s premier shopping strip.
Fitzroys’ Chris Kombi and Mark Talbot, in conjunction with Jeremy Gruzewski and Liam Rafferty of Aston Commercial, sold 71-73 Church Street & 36 Carpenter Street following an Expressions of Interest campaign that generated interest locally and from across Australia.
The fully-leased heritage-style 990sqm building is on a significant 931sqm corner landholding and 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.
The sale price reflected a sharp blended 3.8% yield, and a remarkably high land rate of $17,363 per sqm and building rate of $16,480 per sqm.
“This was undoubtedly one of the best strip retail investment opportunities we’ll see come to the market in 2022,” 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,” he said.
“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.”
“Prime Melbourne shopping strip assets offer an investment prospect that is simply hard to beat, and Church Street, Brighton is notoriously tightly held. As expected, this combination of factors was reflected in the national enquiry and hugely competitive offers we received.”
The property is just the third to have sold along the strip since September 2019 - and all three of them have sold through 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 & 36 Carpenter Street site enjoys a high level of foot traffic and is surrounded by some of Australia’s most popular fashion and lifestyle retailers that Church Street, Brighton is known for. It is equidistant to Woolworths and the iconic Dendy cinema complex, and sits amongst leading retailers including Scanlan & Theodore, Mecca, Witchery, Kookai, and major banks.
“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,” Gruzewksi said. The immediate catchment has been bolstered with the introduction of medium-density residential developments in what is broadly a low-rise suburb.
“Investors recognise that Melbourne’s shopping strips have demonstrated their resilience over the past two years, and none more so than Church Street, Brighton,” Talbot said.
According to Fitzroys’ latest Walk the Strip report, 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%. Underlining the strength of the catchment, the proportion of specialty tenants such as Nike and Ecco has increased over the past three years to 58%, giving it the highest fashion and discretionary retail component of any strip in Melbourne.
Fitzroys has now sold $41.585 million of worth of properties within the absolute prime of major shopping strips across Melbourne in recent weeks, including properties in Burke Road, Camberwell; Chapel Street, South Yarra; Glenferrie Road, Malvern; and Glenferrie Road, Hawthorn.