Now is the time to buy on Chapel Street: Beller Commercial's Fred Nucara

Now is the time to buy on Chapel Street: Beller Commercial's Fred Nucara
Now is the time to buy on Chapel Street: Beller Commercial's Fred Nucara

Melbourne's iconic shopping and dinning precinct of Chapel Street's fortunes have fluctuated many a time.

And now is the time to buy, according to Beller Commercial director Fred Nucara.

Chapel Street (South Yarra, Prahran and Windsor) has a pipeline of development projects worth more $150 million, including hotels, schools and new civic amenities.

From an established, retail strip that traverses from high-end designer labels and international anchor tenants, to the slightly raffish retail strip of Windsor, where a new hip neighbourhood has emerged, there are currently 45 vacancies on Chapel Street.

"Now is the time to buy, buying during counter cycles when an area is perceived to be suffering often sees huge financial reward long term,” said Nucara.

Corelogic also noted earlier this year that Chapel Street commercial property sales increased in the three months to February.

The property data firm said that sales recorded in the quarter ending February 2017 totalled $26.6 million from nine sales, compared with $3 million from three sales in the three months to November 2016.

The popular Café Sienna on the corner of 402 Chapel Street above ( image courtesy Plus Architecture) is being redeveloped by Spotlight Property Group and will feature a mixed-use development of 87 apartments and a proposed 4.5-star Aloft hotel run by the Starwood group with 174 hotel rooms.

Further down and at 303 Chapel Street, behind Coles supermarket, The Cato Square Project is one of the largest and most ambitious construction projects ever delivered in the City of Stonnington.

The vast expanse of The Cato Street carpark that flanks two supermarkets will be undergoing a makeover to a new public meeting place called ‘Cato Square’.

This $60+ million transformation will become almost 10,000 sqm of multifunctional urban parkland with underground car parking tucked out of site.

When completed in 2019, Cato Square will provide urgently needed open space for passive recreation, events, festivals and markets.

Some 200 metres west of Chapel Street, a high school is under construction.

“The $25 million Prahran High School will have the capacity to enrol up to 650 students and will become a major educational destination for the area and added boon for the Stonnington community.

With the spate of infrastructure projects, Nucara advises that investors should not be too worried about present rents but consider the future land value.

“Too often buyers are influenced by short-term factors such as high vacancy rates, rather than adopting a long-term view for commercial property in designated proven shopping strips.”

The underlying land value will not depreciate, however, sometimes purchasers need to accept an investment return of 3-5% in the meantime, he added.

"History has proven that what you pay today, even if it is within a precinct with high vacancy rates at that time, has shown to be relatively cheap, as tomorrow is a different ball game” says Fred.

Recently, a tenanted commercial building at 228-230 Chapel Street, Prahran went under the hammer on May 18. It was sold for an undisclosed sum. Previously, the property traded for $1.7 million, according to Corelogic RP Data.

Tags: 
New Developments Beller Commercial

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