A generational opportunity in the absolute prime of arguably Australia’s most famous shopping strip has sold for $5.825 million.
Fitzroys’ Mark Talbot and David Bourke sold the four adjoining freeholds at 587-593 Chapel Street, South Yarra, just metres from the high-profile intersection of Toorak Road, under the hammer on behalf of a vendor that had owned the property since the 1940s.
A local investor bought the property on a very sharp passing yield of 2.9% at auction which had multiple bidders competing for the asset.
The prominent property comprises four freehold buildings on four separate titles spanning 354sqm of Activity Centre-zoned land. It has a substantial 14.6m of frontage to Chapel Street and rear access from Penny and Pattison Lane, entered from both Chapel Street and Toorak Road.
The property is currently leased to tenants Jumi’s Cafê, Bisonte, and Green Cup.
“This was a really good result reflective of the demand from buyers we’re seeing across the market,” Bourke said.
“The market continues to recognise the resilience shown by Melbourne’s shopping strips, and we’ve seen again there’s a large amount of capital pursuing these types of opportunities after a lack of quality stock was made available over the past two years.”
Talbot said, “There was huge potential here for investors, part owner-occupiers, value-add players and developers, and as expected we received huge enquiry reflecting that.
“It’s incredibly rare to find an opportunity as versatile as this, let alone in the absolute prime of arguably Australia’s most famous shopping strip.”
Talbot said investors noted the rental upside potential and scope for further rental growth, while the property could be used as a generational landbank during a transformative period for one of Melbourne’s busiest suburbs, and developers and value-add players were motivated by the prized Activity Centre zoning.
“South Yarra’s undergoing a transformative period that is bringing new residential, retail, office, and hospitality offerings, and the beating heart of that is Chapel Street,” Talbot said.
Newmark Capital, Gurner and Qualitas are currently planning the $1.5 billion Jam Factory redevelopment, while Vicland recently completed the 11 Wilson Street office building, Goldfields is completing a new office tower at 627 Chapel Street, and US company Greystar is planning Australia’s biggest build-to-rent project in the suburb.
Dahua, Simonds and Spotlight are also developing apartment projects in the suburb.
Fitzroys has now sold $41.585 million of worth of properties within the absolute prime of major shopping strips across Melbourne in recent weeks, including properties in Burke Road, Camberwell; Church Street, Brighton; Glenferrie Road, Malvern; and Glenferrie Road, Hawthorn.
