Melbourne’s commercial property market continues to demonstrate its resilience and adaptability, with another remarkable investment result realised in the face of changed sales conditions.
Friday’s scheduled auction for the warehouse site at 3 Graham Road, Highett - home to artisan bakery The Flour House - through David Bourke and Tom Fisher of Fitzroys was quickly flipped to an online event as Melbourne was plunged into a sixth snap lockdown on Thursday afternoon.
Bourke oversaw the virtual auction from his home and the property was knocked down to a private investor for $2.755 million, at a whopping 45% above the reserve set by the vendor that had held the property since 1965.
The sale price also reflected a remarkably tight 2.7% yield, with The Flour House having a long 5+5-year lease returning $79,769 plus outgoings and GST. Functional improvements comprise a part-single and two-storey 1,115sqm office and warehouse with dual roller shutter door access and on-site parking to Graham Road.
Fisher said the purchaser was attracted to the location and future development potential of the dominant 1,344sqm site with more than 30 metres’ frontage to Graham Road. Zoned Commercial 2, the site also offers direct access to major arterial links including Nepean Highway and Beach Road, providing easy access to the CBD and the south-east suburbs.
“Melbourne’s commercial property market has again proven its adaptability and resilience. We had 10 registered bidders dial in to the virtual auction, and together with the remarkable result this shows that intermittent lockdowns have not deterred buyers,” Bourke said.
“Vendors have seen growing evidence there are large volumes of capital out there that investors are willing to deploy, and with technological and logistical advances all parties are much more confident in proceeding with auctions and achieving a strong result.
“There remains pent-up demand for income-producing assets by investors, it was also evident through the campaign that demand from occupier was strong too” Fisher said
Fisher said the seamless transaction for all parties saw the electronic exchange of contracts and transfer of funds immediately afterwards.
Fitzroys sold other investment properties in Church Street, Brighton and Burke Road, Camberwell for a combined $12 million-plus over two auctions in May as Lockdown #4 came into effect.
13 Church Street sold for $6.070 million, at a sharp 2.5% yield, following the announcement of the snap lockdown and just hours before restrictions came into effect, and 634 Burke Road, occupied by Mecca Cosmetica, sold for $6 million - an incredible $1.4 million above the reserve, under the virtual hammer the following day.
Fitzroys made the decision to keep up the momentum of the campaigns for the respective vendors of 46 years and 60 years and push on with proceedings.