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Local investor’s bullish confidence drives acquisition of two prime South Yarra retail investment asset

Jess Freeman • 25/10/2023

South Yarra

A prominent local investor has made a significant move in Melbourne's bustling real estate market by acquiring two prime retail investment assets located at 471 and 473 Chapel Street, South Yarra. The transaction, completed for an undisclosed sales price but boasting an impressive 2% yield, represents a confident first-mover advantage in one of Melbourne's most coveted neighbourhoods.

This successful transaction marks a pivotal moment in South Yarra's evolution, aligning with the suburb's upcoming major renaissance supported by the City of Stonnington and an unprecedented $5 Billion development pipeline from both local and offshore private and institutional investors.

Throughout the campaign, 148 genuine buyer enquiries were received, leading to 26 inspections. The successful bidder secured the 210sqm* and 144sqm* properties at a Building Rate of $11,723* per square metre and a Land Rate of $12,613* per square metre, through Cushman & Wakefield’s Karim Ford and Leon Ma.

Cushman & Wakefield’s International Director & Head of Asia Capital Services, Leon Ma, commented on the dynamic nature of buyer profiles, saying:"At the campaign's outset, most of the interest originated from boutique developers. However, as the campaign progressed, we observed an exponential level of enquiry from a broader range of investors including 'mum and dads', self-managed super funds, family offices and first-time commercial real estate investors, which enabled us to work closely with a diverse pool of capital.”
Cushman & Wakefield’s Executive, Investment Sales, Victoria, Karim Ford, added: "In today's dynamic market, it's crucial to heed market feedback and adapt swiftly. This transaction underscores the significance of aligning campaigns with market dynamics, reflecting the growing demand for prime, strategically positioned strip retail assets in emerging neighbourhoods with robust fundamentals.”
This successful deal follows Cushman & Wakefield's recent triumph in the Spring selling season with the auction of 131 Toorak Road, South Yarra, which achieved an impressive 3.57% yield. The agency's continued success in South Yarra includes the recent campaign launch of notable assets such as the NAB flagship bank at 600 Chapel Street, which transacted in 2022 for $16.2 million. Additionally, Cushman & Wakefield is managing other high-profile offerings in the City of Stonnington, including 467 Chapel Street, 469 Chapel Street, The Malaysian Consulate at Levels 1 & 2, and Level 3, 16 Claremont Street, Level 1 at 529 Chapel Street, 1432 Malvern Road, Glen Iris, and Ground Floor at 17 Clifton Street, Prahran.Mr. Ford believes “In the world of investments, the exponential surge in Strip Retail enquiries from 'mum and dad' investors, syndicates, and family offices is not just a trend; it's a testament to the wisdom of simplicity. With barriers to entry remarkably low compared to higher-value assets, these avenues offer a haven of opportunity. The allure lies not just in the ease of entry, but in the remarkable returns waiting to be unlocked. Through strategic value-add and refurbishment, these spaces transform into gateways of prosperity, reminding us that sometimes, the most significant rewards come from the astute pursuit of the seemingly ordinary."

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