Melbourne’s prime retail strip investment market has passed its latest test for 2023 with flying colours, with an outstanding result achieved for a shop in the heart of strong- performing High Street, Armadale.
Fitzroys’ Chris Kombi and Lewis Waddell sold 1014 High Street, Armadale for $3.525 million, on a sharp 3.4% yield, after an auction campaign that generated huge interest from investors and owner-occupiers.
Four bidders competed for the two-storey 140sqm building, which is on 208sqm of land with rear access and on-site parking and located in the absolute prime section of High Street, Armadale near Kooyong Road and between Kooyong Road and Huntingtower Road.
The property is currently leased to Nimble Activewear and offered with a strong holding income, with the lease expiring in 2024.
“The market has clearly recognised the powerhouse shopping strip that High Street, Armadale has become. This part of High Street has 0% vacancy and there’s a number of local, national and international tenants looking for space in the prime of what has undoubtedly become one of Australia’s best-performing retail strips,” Waddell said.
The roll call of brands in this section of High Street includes Aesop, Dion Lee, Venroy, Mecca, Zimmerman, Rachel Gilbert and Oroton.
“As well as the long queue of businesses waiting to get into High Street providing surety of finding a quality tenant, rents have increased notably in the last 18 months, so there’s excellent rental upside opportunity for the purchaser,” Waddell said.
“We’re still seeing investors put their faith in income-producing bricks-and-mortar assets at a time of share market and residential market volatility. Higher interest rates clearly haven’t deterred investors from pursuing high-quality opportunities.”
Kombi said, “This was an ultra-rare opportunity to acquire an investment in the absolute prime of one of Australia’s best-performing shopping strips. This part of High Street, Armadale is incredibly tightly held.
“Over the past 18 months, High Street, Armadale has been challenging traditional titleholder Church Street, Brighton for the reputation of Melbourne’s best retail strip.”
According to Fitzroys’ new Walk the Strip, vacancies in High Street, Armadale have tightened further from the improvement recorded in 2022, from 5.1% to just 2.3% in 2023 – among the absolute lowest of Melbourne’s shopping strips.
The report shows that has coincided with new developments bringing quality retailers to the strip. Five current developments on the strip will bring around 115 new apartments to the immediacy of the strip, boosting its prized affluent and established catchment and further supporting trade.
These are in addition to the recently completed Alara project at 953-967 High Street, which has transformed this part of the strip, bringing 19 apartments as well as a food hub – now home to famous Sydney butcher Victor Churchill, as well as popular bakery Ned’s Bake and fast-expanding Japanese salad purveyor Fishbowl.
Bookending the strip, Moda is bringing 26 apartments to 835 High Street, which has also delivered world-famous Lune Croissanterie and popular boutique grocers The Leaf Store to the strip.
Fitzroys has sold a number of properties in the past 18 months in varied parts of High Street, Armadale, on sharp yields and very high land rates. These include:
• 1082 High Street for $3.235 million, on a 2.16% yield and land rate of $16,338 per sqm
• 720 High Street for $1.58 million, on a 3.2% yield and land rate of $11,791 per sqm
• 1272 High Street for $1.715 million, on a 4.3% yield
• 1208 High Street for $1.91 million, on a 3.9% yield
• 1147-1151 High Street for $$6.15 million, on a 2.7% yield and land rate of $14,500 per sqm