A Melbourne investor is selling a modern Williamstown retail asset for a speculated $20 million – nearly twice the value attached to it, when it last traded among owners in 2011.
The fully leased "mini hub" – as it was marketed – includes six shops, two leased to high-profile occupants Priceline and NAB – and is exchanging on a low yield of about 4.7 per cent.
In the heart of the seaside suburb's retail core, and next door to a Coles supermarket, 19-21 Douglas Parade has a lettable area of 1243 square metres and sits on a plot, also that size.
Developed 10 years ago, the property replaced two stand-alone buildings – a Ferguson Plarre bakehouse and a dry cleaner – and has a frontage of more than 30 metres to Wellington Street, opposite a car park. Some 60 metres of the plot abuts the Coles Mall.
Longer term the complex has airspace redevelopment potential. A profit could also be turned from subdividing and selling down each of the retail spaces. It is understood it is to be traded to another local private investor, but this could not be confirmed with Allard Shelton agents, who would only discuss the general campaign.
Joseph Walton, Michael Ryan and James Gregson said more than 80 enquiries were received from a mix of high net worth private individuals, potential owner-occupiers, syndicated groups and funds.
The agency has transacted $35 million of Williamstown property since the start of April, including two premises in Ferguson Street, which are exchanging off-market for a combined value of nearly $11.6 million.
Mr Gregson said the inner-west was particularly hot with "obvious high capital gain growth prospects".
The pool of investors targeting retail investments is also large, and growing, according to CBRE director Josh Rutman, who is marketing a substantial retail across town, in Armadale.
At 926-930 High Street – and with 20 metres of frontage to a popular retail strip– the asset, leased to auction house Mossgreen, is expected to sell for about $10 million later this month.
"The prospect of a long lease [more than two to three years] with a property that presents sound fundamentals and also potential for future development certainly resonates with the current buying market, as well as their financiers," Mr Rutman said.
"Buyers may have recently sold their land-rich assets to developers due to land tax pressures or underutilisation or may be those who are simply looking to diversify away from residential property or shares."
Adam King, the director of CBRE's capital advisory division, said financiers locally and internationally were gravitating towards lending on more quality, income-producing assets.
"We are also seeing interest from overseas lenders to lend on larger quality investment assets, which should help to drive better loan terms."