Brighton has again reaffirmed its blue-chip status, as a rare retail investment property auction on arguably Australia’s premier shopping strip, Church Street, delivered a sensational result.
Fitzroys’ Mark Talbot and Tom Fisher sold 51 Church Street, home to powerhouse ASX-listed tenant Flight Centre, under the hammer for $4.45 million, on a very sharp 3.2% yield. A local purchaser won out of the four bidders who competed for the property at the auction, representing a mix of local and Asian-backed capital.
The sale price also reflected a high building rate of $39,732 per sqm and land rate of more than $19,600 per sqm.
Flight Centre, which has occupied the building for over 20 years, has renewed its lease until December 2028.
“Travel is back and the extended lease to Flight Centre was considered a real positive. The campaign showed strong confidence in the retail sector and also the travel industry,” Talbot said.
“Together with a lease term of six years, the asset was considered to be ‘risk-free’ by many in the market. This offered a secure, consistent cashflow from a quality global tenant at a time of sharemarket and residential market volatility. We’re seeing investors continue to put their faith in bricks and mortar assets,” Talbot said.
One of world’s largest travel groups, Flight Centre boasts a market capital of $2.9 billion and a vast leisure and corporate travel sales network that extends through Australia and New Zealand, North America, the United Kingdom, Europe, the United Arab Emirates, China, India, Singapore and Malaysia. Flight Centre’s global corporate travel management network extends to 90 other countries through licensing agreements with independent local operators.
Fisher said, “Investors are always attracted to Church Street, Brighton’s ultra-low vacancy rate and premier tenants.” According to Fitzroys’ forthcoming Walk the Strip report, Church Street again retained the lowest vacancy rate of Melbourne’s iconic shopping strips in 2022, at an ultra-low 0.7%.
“Melbourne’s shopping strips have demonstrated their resilience over the past two years, and none more so than Church Street, Brighton,” he said.
51 Church Street 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 close to both Woolworths and the iconic Dendy cinema complex, and sits amongst leading retailers including Scanlan & Theodore, Mecca, Witchery, Kookai, and major banks.
This was just the fourth sale along Church Street since September 2019 - and all four have sold through Fitzroys. They have included this year’s $16.2 million sale of 71-73 Church Street & 36 Carpenter Street, home to Nike, Ecco and Laurent, while the NAB branch at 35 Church Street sold for $6.105 million at a 3.5% yield three years ago, and 13 Church Street, home to international retailer Oroton, sold for $6.07 million last year at 2.5%.
“Church Street, Brighton is notoriously tightly held and we consistently see hotly contested campaigns culminating in very strong sales results,” Fisher said.