Soaring shop prices in Melbourne's outer suburbs are showing no signs of slowing.
A small 188-square-metre, single-level building in Melbourne's outer-eastern Mount Waverley recently sold on a 2 per cent yield under the hammer.
It was a tight result that Paul Rizzo of Ray White Commercial Oakleigh attributes to the building's future development potential and long-term lease to a laundromat, returning rent of $12,622 per annum.
Mr Rizzo said the $616,000 sale price was more than $160,000 above the vendor's reserve. "This investment attracted a great crowd and five bidders."
At an auction in Ferntree Gully, also in the city's outer east, "quick and aggressive" bidding saw a site with six shops at 100 Station Street sell for $2.9 million, about $650,000 above reserve, Cameron's James Johnson and Ben Cooper said.
The auction lasted for just five minutes, the pair said.
Spirited bidding for shops, even vacant ones, is now common in the city's suburbs despite grim retail warnings and a clutch of long-established retailers – Topshop Australia, Marcs, David Lawrence, Herringbone and Rhodes & Beckett – being tipped into administration.
In Bentleigh, a self-managed super fund purchased a vacant property on the corner of Robert Street and 496 Centre Road for $2.04 million.
The 196-square-metre site sold at a land rate of $10,625 per sq m, according to CBRE's Rorey James, Justin Dowers and Nic Hage.
"The depth of local, interstate and offshore bidding was very encouraging and we have no doubt that an international campaign paid off for our vendors," Mr James said.
Even the city's outer suburbs are experiencing a boom in retail prices.
Three buyers put in 28 bids in an effort to get the keys to a partly refurbished shop at 98 Young Street in Frankston. It sold at auction for $1.29 million, or $340,000 above the reserve.
The building was marketed by Linda Ellis of Nichols Crowder with a long-term lease to disability employment services firm, Campbell Page.
"The return of 3.4 per cent is at record levels for Frankston", Ms Ellis said.
Heidelberg's main strip is also on a bull run.
Alex Ham and Andrew Thorburn from Gross Waddell sold a shop at 123-125 Burgundy Street for $2.72 million on a very tight yield of 2.9 per cent.
The two single-level shops on one title sold in front of a large auction crowd.
While yields in the city tighten to around 3 per cent, yield spreads for shops in country areas are around 7 per cent.
A private investor paid $1.45 million for the Westpac Bank freehold at 130-132 Murray Street in Colac, 150 kilometres south-west of Melbourne.
The price represents a rate of $2457 per sq m with an initial yield of 7.2 per cent, Knight Frank's Paul Pellegrino said.
The sale demonstrates strong appetite even in regional areas, he said.