Investors keen to be a part of Box Hill’s evolution into a Melbourne satellite city have competed fiercely for a neighbourhood paint shop, which has sold under the hammer at a sharp 3.2% yield.

Terence Yeh of Fitzroys sold the 160sqm freehold at 169 Middleborough Road for $995,000 on behalf of private owners.

The auction campaign marked the first time the property had been offered in 33 years.

The single-storey building is on a Commercial 1-zoned site of 185sqm with rear access and on-site parking, and has a secure 5+5-year lease to Box Hill Paint Specialists.

Yeh said the campaign generated strong enquiry from more than 70 investors.

“Investors continue to look for well-located, securely-leased Melbourne shopping strip properties that present solid income-producing opportunities in the low interest rate environment,” he said.

The property is located within a neighbourhood shopping strip home to a mix of national tenants such as Australia Post and the Cheesecake Shop, as well as established local operators.

The strip is adjacent to the Whitehorse City Council headquarters, across the road from a United Petroleum service station, and close to a large format retail precinct including Bunnings, Officeworks, Petbarn and Spotlight.

“Box Hill is at the heart of one of Melbourne’s most sought-after residential areas, and this property and its tenant are perfectly positioned to benefit from the area’s development and population boom,” Yeh said.

“The commercial and residential development reflects the trend of Melburnians increasingly looking to live and work in the same area, and is positioning Box Hill as Melbourne’s eastern hub, offering investors excellent growth prospects.”

Population research house .id expects the Box Hill population to grow from 15,671 this year to 25,015 by 2031, and to just under 29,000 by 2041. In 2016, the population of Box Hill was 11,970.