Federal government sells Oakleigh South retail investment for $1.85m

The North Road property abuts a Dan Murphy’s car park.

The federal government has sold a large, high-profile retail investment abutting a Dan Murphy’s car park in Melbourne’s Oakleigh South.

Fifteen parties vied for 1146-1148 North Road, which traded for $1.851 million to a local.

The price reflects a 4.1 per cent net yield, Savills marketing agents Julian Heatherich, Mark Stafford and Benson Zhou said.

The occupier, national retailer Direct Chemist Outlet, is on a long-term agreement for the 260 sqm of contemporary fit out area and 10 car parks; with options it could stay until 2038.

Oakleigh South is 17 kilometres south east of the city.

The agents said the price point of 1146-1148 North Rd – being considered affordable – plus the essential service nature of the tenant, drew significant enquiry during the campaign – which was conducted during COVID-19 conditions (story continues below).

Fourteen investors looking

The 260 square metre retail space has been modernised.

“With numerous reports of marketing struggles, this result for a small strata retail in a suburban location sits comfortably with some of the best results for strata retail in the past 15 months,” Mr Heatherich said.

“Well located and securely leased commercial investments continue to perform extremely well and attract significant interest,” he added.

“Ultimately to deliver 15 offers for this asset in the current environment highlights the demand for well-located, high quality investment opportunities.

“We are now dealing with 14 under bidders who are keen to secure their next investment”.

The property is about 17 kilometres south east of Melbourne.
Direct Chemist Outlet has two five year (renewal) options after its initial lease expires in 2028.
The North Road site relative to Warrigal Road, Chadstone Shopping Centre and Melbourne CBD.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.