GormanKelly has recently sold 4 ground floor units within two multilevel developments in Montrose Street, Hawthorn, being 8 Montrose Street (developed by Kokoda Property) and Hawthorn Black at 5-7 Montrose Street.
All 4 ground floor units were sold to owner occupiers for office use. The supply of strata offices in desirable locations has either stalled or decreased, with many existing older office buildings being converted into high density residential accommodation driven by high underlying land values.
In commercial 1 zoned streets, Councils typically require developers to ‘activate’ the ground floor of their high density residential developments for commercial use. These commercial real estate assets are usually pushed to retail and hospitality occupants for use as cafes, restaurants and food related retail. These businesses will always take at least some of the available space, however a high density building can only support so many cafes (especially in secondary and no prime sectors). This often results in a number of commercial property units sitting vacant long after these developments have delivered. It is not uncommon to see one of 3, 4, 5 shops occupied while the rest remain sitting there as a thorn in the side of developers who understandably want to move on.
When planning your next high density development you should seek not only to appeal to retail/hospitality users, but also to office users. They require far less infrastructure (no grease traps, extraction flues etc) and if the right considerations are taken into account, you should ultimately sell/ lease all your commercial units quickly.
If you want to know more about the sold units please send me a message here or if you need advice on selling, leasing or managing commercial properties, let us know how we can help you.
Written by Samuel Torrance
A Bachelor of Commerce and a background in finance and hospitality provided Sam the ideal platform from which to launch his career in commercial real estate with GormanKelly.