Retail assets in Mornington Peninsula sell for $2.9 million on record low yield

A retail property in Mornington Peninsula has sold for $2.9 million under the hammer, at a record low yield of 3.52% for the area, indicating the strength of the commercial property market there.

The sale of the properties at 157 Main Street and 1 Barrett Lane, which has two shops and an apartment over one title, reflected a land rate of $10,357 per sqm.

The property encompasses a land area of 280 sqm.

Both properties are leased to cafes, with Biscottini Café occupying 157 Main Street on a three-year deal while 1 Barrett Lane is leased to Onde Café on a three-year lease with another option for three years.

The selling agents were Chris Kombi and Mark Talbot of Fitzroys.

Kombi said commercial transaction across the Mornington Peninsula have returned strong results over the past 18 months particularly, as local and offshore investors alike have increasingly looked beyond the heated inner and middle metropolitan areas for investment opportunities. 

“The tightening yields across the region reflect the growing consistent demand for retail, hospitality and social infrastructure services from the local population, underpinning the viability of traders in the future,” added Talbot. 

Earlier this year, Fitzroys sold a Rosebud retail property to a Chinese buyer for $2.045 million at auction, reflecting a record price for a single-fronted shop in the Peninsula location, and at a 4% yield. 

Fitzroys also recently sold the Kingswim swim school centre at 2 St Catherines Court in Mornington for $5.4 million, with a secure 15+10+10-year lease to major not-for-profit organisation YMCA from October 2011. 

The demand in the region is spreading throughout the retail market, with a local investor acquiring the Baxter-Tooradin shopping centre for $16.6 million in May, shortly after the sale of the Hastings Shopping Centre for $32.1 million.