Melbourne’s prime shopping strip market set for its first auction tests of 2024

Melbourne’s prime shopping strip market is set for its first auction tests in 2024, with assets in the absolute prime of Lygon Street, Carlton and Brunswick Street, Fitzroy going under the hammer at respective on-site auctions on Thursday, March 14th.

325 Lygon Street, Carlton will go to auction at 12pm on the day, with expectations of $1.7 million-plus. It is the long-term home of Carlton Newsagency and directly opposite Lygon Court, home to Cinema Nova and Brunetti.

Fitzroys’ Mark Talbot and Shane Mills are marketing the property on behalf of the Saffar and Durlacher families.

Carlton Newsagency has been at the property for around 20 years. Rental return is

$77,712pa plus outgoings and GST, with the current 7-year lease ending 31 January 2025 with 2 further terms of 5 years each.

“There’s potential for significant rental growth from January,” Talbot said.

“This property will suit investors looking for significant rental growth, or a long-play buyer looking for an asset that will deliver a solid ongoing income stream.”

Talbot said the property is in the absolute prime of Lygon Street, between Faraday and Elgin Streets, opposite Lygon Court – home to Cinema Nova, Brunetti Classico and Woolworths – and amongst the strip’s famous cafés, restaurants, bars, retailers and entertainment venues including Tiamo, Heartattack and Vine, Milk the Cow, Grill’d, DOC Pizzeria, Crinitti, King and Godfrey, Seed, Mecca, Sportsgirl, Country Road, Readings, to name a few.

“This is an incredibly tightly held part of Melbourne. Lygon Street is arguably Australia’s most famous dining strip and has come back from COVID in a big way, bringing huge confidence to owners and the market about the investment credentials and trade prospects of the strip,” Talbot said.

According to Fitzroys’ most recent Walk the Strip report, vacancies on Lygon Street have come down from 20.0% in the depths of COVID to now sit at just 6.0%.

Talbot said the return of local and international students to Melbourne’s education precinct close by has also underpinned the return of trade along Lygon Street, and the rapid transformation of Carlton to accommodate and encourage student and residential apartment developments will further enhance its viability, as will the incoming Parkville Station, part of the Melbourne Metro Tunnel project, which is set to open in 2025.

The dominant triple-storey freehold, known as the Shawcross Building, is on the corner of Argyle Street and is fully leased to Shawcross Pizza, Lost Boys Bar and Brunswick Street Gallery, returning $227,688pa plus outgoings and GST.

The 580sqm building features a towering brick façade in the American Romanesque style and comprises 2 ground-floor shops and 2 light-filled upper levels, on a valuable corner landholding of 314sqm with on-site car parking. It has an expansive frontage of 15.24m to Brunswick Street, 20.22m to Argyle Street, plus laneway frontage.

“This is a generational opportunity to acquire one of Brunswick Street’s most iconic and high-profile buildings, located in the absolute heart of one of Melbourne’s most vibrant hospitality and lifestyle strips,” Kombi said.

“Investors can acquire one of the most dominant properties in Brunswick Street, Fitzroy, and secure a strong cashflow from quality tenants, with great rental uplift and value-add prospects in the coming years.”

Vacancies on Melbourne’s archetypal inner north hospitality and lifestyle strip are at their lowest in years as Melburnians again embraced shopping, dining and eating out. According to Walk the Strip, vacancies on Brunswick Street, Fitzroy now sit at just 4.6%.

“Prime assets in Melbourne’s iconic shopping strips are offering excellent investment credentials,” Kombi said.

“The strips are currently experiencing a real period of renewal.”

He said Yarra Council has promoted significant development throughout Fitzroy and Collingwood in recent years, demonstrated by the number of major projects in different stages of planning, construction and completion.

“More people want to live, work and play in highly accessible areas with quality lifestyle attributes, and the major influx of residential and commercial development throughout the area has resulted in a huge population boom that’s further underpinned the viability of Brunswick Street.”

Brunswick Street is well-serviced by public transport, with tram services operating along Brunswick Street itself and bus services along Johnson Street and Victoria Parade, while Victoria Parade and other major arterial roads Punt Road and Hoddle Street, Alexandra Parade and the Eastern Freeway are all close by and easily accessible.