The sale of a Bay Street retail property on a sharp 3.6% yield is the latest evidence of the emergence of the Brighton shopping strip as a popular location for investors in its own right.
Fitzroys’ Mark Talbot and Tom Fisher sold 336 Bay Street for $1.085 million, on a sharp yield and high building rate of $18,700/sqm, on behalf of a private investor.
The open-plan 58sqm building, on an 87sqm site, has a full-height, high-exposure glass shop front and is occupied by established and multiple store tenant Serenity on a lease expiring at the end of March 2024, with options through to March 2028.
The campaign generated huge enquiry that was dominated by investors, Talbot said.
“The purchaser is looking at using the property as a long-term hold, willing to take on any risk of a short-term lease and more than confident in the demand from retailers and trade prospects along Bay Street,” he said.
“Bay Street, Brighton serves one of Melbourne’s most prized catchments with prestigious schools, which has maintained a strong demographic with high disposable income, supporting strong retail trade.
Talbot said the 3.6% yield is a great result, up there with Fitzroys’ recent $7.15 million sale of the NAB branch building on Church Street, at 3.5%.
According to Fitzroys’ Walk the Strip report series, Bay Street, Brighton has seen vacancies come down to a long-term low of 5.9%. Talbot said the Coles development close by has added a new dimension and created another prime section of the strip.
“Bay Street has typically been in shadow of Church Street when it comes to retail in the area, but it’s really come into its own as a shopping and lifestyle strip over recent years, and investors are taking note,” Talbot said.
“The strength of Bay Street has recentred the suburb. More people in Brighton and the surrounding suburbs gravitate towards Bay Street and it means there’s more demand and expectation for shopping, dining and medical offerings on the strip.”
The 336 Bay Street property is close to a lot of popular national and local operators, including Coles, Chemist Warehouse, Australia Post, Flight Centre, Palace Cinemas, Hotel Brighton, Mr and Mrs P, Rocksalt and more.
Fisher said the the property is also very accessible, which was a further attraction to buyers.
“There’s excellent parking options with car park directly behind the property, and the site also offers easy access to the CBD via Nepean Highway and it’s walking distance to North Brighton train station,” he said.