Fully leased showroom near South Melbourne Market sells for circa $5M

Colliers has secured an unconditional sale for a fully tenanted retail investment opportunity in South Melbourne for around $5 million with a short settlement period of only 27 days, highlighting the high demand for city fringe investment properties.

The asset, located on 150-158 Montague Street, South Melbourne, was exclusively sold by Colliers’ selling agents Daniel Wolman, Oliver Hay, Leon Ma, and Alexander Leggo through an off-market transaction.

The property generated interest from a wide range of buyers, including developers, investors and future owner occupiers, before it was snapped up by a local investor on a circa 4.5 per cent yield.

The property is currently leased to the renowned European automobile company Ducati, who entered a five-plus five-year lease at the start of 2022, generating a net passing income of approximately $250,000 per annum.

Colliers’ Head of Investment Services, Daniel Wolman, said the asset’s strategic location in the Fishermans Bend precinct and the secured national tenant make this an outstanding investment set to produce a strong return on investment in the coming years.

β€œDespite concerns around rising interest rates, demand for well-located city fringe assets continues to demonstrate the ongoing confidence in the Melbourne commercial market,” said Mr Wolman.

South Melbourne trends away from commuting into the CBD, opting for a more flexible location with access to a range of transport networks, including the future ANZAC station and well- established retail and hospitality offerings.

β€œThe property is a short walk to the South Melbourne Market and in a high exposure position, making it a prime location for various retailers,” Mr Wolman added.

Colliers National Director Oliver Hay said there had been an increased deal activity in the precinct, as South Melbourne has become a more desirable place to live and work, with new projects and amenities continuing to service the area.

The showroom sits on a 767 sqm* landholding with 26* meters of street frontage to Montague Street and rear access.

β€œFavourable Capital City 1 Zoning under the Fisherman’s Bend Urban Renewal Structure Plan (STCA) also provides the potential to capitalise on a flexible development project in the future,” Mr Hay added.

The sale of 150-158 Montague Street adds to Colliers’ outstanding portfolio of recent transactions in the City Fringe, including 16-20 Thistlethwaite Street, 166-174 Inkerman Street, and 197 & 197b Brunswick Street, as the Melbourne City Sales Team starts to wrap up yet another strong year.

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