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 Colliersโ€™ 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.

Colliersโ€™ Head of Investment Services, Daniel Wolman, said the assetโ€™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.

โ€œDespite concerns around rising interest rates, demand for well-located city fringe assets continues to demonstrate the ongoing confidence in the Melbourne commercial market,โ€ 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.

โ€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,โ€ 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.

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

The sale of 150-158 Montague Street adds to Colliersโ€™ 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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