693-699 High Street, Prahran comprised three corner shops and a rear residential unit on a corner site of 1,038m2 which returned $296,000 per annum.
The shops had various lease terms with options meaning the future development potential of the commercial property was restricted for around 10-12 years. Accordingly, the property drew significant interest from passive investors more so than developers.
The property was strongly contested by 5 bidders and sold for $7,550,000 which was 30% above the reserve and reflected a low yield of 3.9% and a strong rate of $7,300/m2 on land area.
The campaign generated significant enquiry with the attraction being that of the corner location and great future development upside.
With interest rates remaining low and capital values holding firm and in some cases still showing good growth, there is strong appetite for commercial and retail investments - this was evidenced by 5 buyers vying for an asset at this price point. This result comes on the back of a number of other retail investment sales we have completed throughout the course of 2015 – most of which were 30%-40% above vendors expectations and in many cases reflected yields below 4%.