Small investors have the opportunity to acquire a prime retail spot on tightly held Swanston Street, with a small shop on the ground floor of the iconic Manchester Unity Building listed for December 6 auction.
The vendors were swayed to offer the property to the market after a 5.6% yield was achieved next door when Shop 2, 220 Collins Street sold earlier this year for $9,250,000 with sale negotiated by CBRE’s Josh Rutman, Mark Wizel and Max Cookes.
The 97 Swanston Street retail space is currently tenanted by foreign exchange business Travel Money Oz, owned by ASX-listed Flight Centre, on a new seven-year lease.
The premises currently brings in net annual income of $122,494 per annum.
The shop stands on one of the busiest retail strips in the Melbourne CBD and on the high premium western side of the street between Collins Street and Bourke Street mall.
It is next door to the premises of a Telstra corner shop at 220 Collins Street, which sold to a private investor prior to auction for $9.25 million on a yield of 5.6% at the end of March.
The marketing campaign for 97 Swanston Street is also being led by CBRE.
“Anything sub-$4 million in the CBD is pretty unique,” Rutman tells Property Observer.
He says there are a number of other factors that are drawing in potential bidders.
These include that it is leased to an ASX-listed tenant on a brand-new lease bringing in $122,000 per year, with the tenant agreeing to 5% annual rent increases every anniversary of the lease.
“This means it has the potential become a positively geared asset quite quickly,” says Rutman.
The property is being sold by a group of private investors.
“It’s one of the tightly held retail strips in the CBD. I have spoken to four or five owners who have owned shops on Swanston Street for 20 to 30 years,” he says.
According to the Melbourne City Council Research Department, over 15 million pedestrians walk past the property annually, which equates to almost 50,000 per day.
“We expect the location of the property to provide continual growth over the next decade, which we believe will help drive significant interest from local, national and international investors.” says Wizel.
It is due to be offered for sale by public on-site auction at 12.30pm on December 6.