The strong sale of an office warehouse in Melbourne’s inner west - home to Australia’s back-to-back champion coffee roaster - is a welcome signal to the market that investors are still active and campaigns continue to be competitive, despite the rising interest rate environment.
Fitzroys’ Marco Sandrin, Brent Glassford and Ervin Niyaz sold 259 Hyde Street, Yarraville for $1.83 million under the hammer after bidding between multiple parties.
Patrick O’Callaghan of O&Co was the transaction manager.
Zoned Industrial 3, the 512sqm building comprises a clearspan warehouse with 2 container height roller doors, corporate office and breakaway area, with on-site parking spaces.
It is leased to Campos Coffee, winner of the Australian International Coffee Awards’ Champion Australian Roaster in both 2021 and 2022, and a subsidiary of listed global coffee giant JDE Peet’s. The secure 5+5+5-year lease includes fixed annual rent reviews and currently returns $82,400pa plus outgoings and GST. “This was a strong result for a strata office and warehouse, with the sale price reflecting a tight circa 4.5% yield,” Glassford said.
“The result is a great signal to the market that there remains good demand despite the Reserve Bank’s consecutive interest rate rises. Buyers are still chasing securely-leased properties that bring a reliable cashflow at a time of sharemarket and residential market volatility, and we’re seeing competitive campaigns, strong results and tight yields.”
Sandrin said there remains a very low supply of quality investment stock available in this part of the market.
“The industrial sector has attracted a huge number of investors at this price point over the past 3 years. Properties invariably attract a depth of interest and are snapped up quickly,” he said.