An incredible fully leased investment and landbank opportunity on 1,570sqm of prized Kew land has smashed expectations, selling for $12.18 million in another demonstration of the strength of the Melbourne commercial real estate market.
Fitzroys David Bourke, Chris James and Ben Liu sold Walpole Hill, at 4-14 Walpole Street in the Kew Junction precinct, via an Expressions of Interest that generated interest local and Asia-backed capital and 12 competitive offers.
The sale price reflected a remarkably sharp yield of 2.5%. It marked the first time in 30 years the property had been offered to market. A land banking private investor was the purchaser.
The property comprises a dominant single-level building of 1,296sqm with 9 fully occupied shops and a rooftop car park providing 46 spaces. Among the range of retail tenants are Jade Kew Restaurant, Buoy Pizza, Beejans Bakery Café, LivFit Physio Kew and Skin & Brows, with leases ranging from three to five years plus options.
Zoned Commercial 1, the property is on 1,570sqm of invaluable corner land in the Kew Junction precinct, with 47.74m of frontage to Walpole Street and 33.15m fronting Walton Street. It is opposite a strong-performing Woolworths supermarket and metres from the corner of High Street.
“This was an ultra-rare opportunity to secure a landmark property in a blue-ribbon suburb with excellent landbanking attributes, and the purchaser can now enjoy an established cash flow and rental upside, and assess the considerable future redevelopment potential,” Bourke said.
“It was an incredibly competitive Expressions of Interest campaign, which was another excellent demonstration of the strength of Melbourne’s commercial real estate market at the moment. Campaigns for quality properties with strong investment and land banking attributes are attracting huge interest - there was more than $125 million of active capital left out on the table in this campaign.”
“Despite the interest rate rises over the last 12 months we continue to see competition for quality assets, and strong results and sharp yields.”
The site’s location within the Kew Junction Activity Centre and Design and Development Overlay 14 DDO14 allows for a building height of up to 18 metres (STPA) and uses including retail, residential, commercial and mixed-use.
Liu said” We continue to recieve strong engagment across our marketing campaigns from investors backed by Asian capital who are looking to secure well located assets with development upside and this sector was well represented in this campaign”.
James said Melbourne’s inner east has a captive hold of the market due to a strong and growing residential catchment, a quality retail offering and burgeoning office market.
“Kew is serviced by all major trading banks, major supermarkets including Woolworths and local favourite Leo’s Fine Food & Wine, together with a host of recognised businesses including Chemist Warehouse, Flight Centre, Woodfrog Bakery, Endota Spa, Toscano’s and Bob Stewart, plus a wonderful food and beverage offering and also had a strong commercial office base.” he said.
The area is well-serviced by public transport, with Route 48 and 109 trams and multiple bus routes providing links to the CBD and wider metropolitan Melbourne, while there are several main arterial roads nearby including the Eastern Freeway to the north and CityLink to the south.
Fitzroys also recently sold the commanding hospitality building at 26-28 Cotham Road, Kew - formerly home to Hellenic Republic, operated by high-profile chef George Calombaris and his hospitality group Made Establishment - following an Expressions of Interest campaign that generated more than 70 enquiries. The $5,006,666 sale price reflected a sharp 3.1% net yield. The immaculately-refurbished 635sqm two-storey building has a 6+6+6-year lease to chefs Ayhan Erkoc and Federico Perez Lopez for their Cotham Dining restaurant and Nazar Wine Bar, both operating under the one lease.