High Street, Armadale remains an investors’ favourite amongst Melbourne’s famous shopping strips.
In the latest strong transaction result, Fitzroys’ Chris Kombi and Lewis Waddell sold the strata-titled 1272 High Street property for $1.715 million, on a tight 4.3% yield.
Private local investors traded the property, which comprises a 165sqm building securely leased to highly regarded and longstanding Armadale beauty clinic Shaèp, which recently moved into the property in a leasing deal also secured by Waddell.
“Both the vendor and buyer live locally and know the area well.
“The investor is acutely aware that High Street, Armadale has been arguably the best-performing strip in Melbourne over the past 18 months. Businesses have been performing well and there’s been incredibly high tenant demand, leaving very few vacancies in the strip,” Waddell said.
According to Fitzroys’ latest Walk the Strip report, High Street saw vacancies come down from 9.1% to 5.1% year-on-year. Specialty retail has been a major driver of leasing activity with its affluent, established catchment supporting the biggest proportion of discretionary retail of any shopping strip.
“Investors are constantly looking to find assets in high-performing retail and lifestyle precincts. Properties in the prime of high-performing Melbourne shopping strips with quality leases are among the most attractive prospects for investors right now,” Waddell said.
He said multiple bidders competed for the property, including locals, investors from across Melbourne, bidders from Fitzroys’ Asian database, and self-managed super funds.
“This property represented a rare affordable price point in High Street, Armadale.
“The strata title was more attractive for rental return,” he added.
“Many investors continue to turn to strata-titled commercial properties to shore up their income stream amid volatility in the stock market.”
Waddell said the result reflected a tight yield for a strata-titled property.
“Properties with secure income and in the best locations are still performing very well.”
Kombi said, “Despite the higher interest rate environment, we have further evidence that buyers are actively in the market. We’re consistently seeing hugely competitive campaigns, multiple bidders at auctions and strong results.
“The high inflation period is expected to be short-lived and interest rates are broadly expected to come down after a period of stabilisation during this year, making returns on properties acquired now all the more attractive.”