Melbourne shopping centre value halves in three years
EXCLUSIVE
A suburban Melbourne retail complex which traded in March, 2021, for $12.8 million, sold again at auction today for $6.25m – less than half.
The result for Mornington’s Barkly Square, with nine strata titled tenancies all up containing 1109 square metres, on 2209 sqm abutting a council car park, reflects a 4.6 per cent net passing yield.
Four shops are empty.
If the asset were fully leased at market rent – achieving between $540,000 to $635,000 per annum – the return would circle 8.6-10.1pc.
The passing yield three and a half years ago when it was full, interest rates were at record lows and it transacted against an $8m guide to a local jeweller – though never settled – was a tight four pc.
Stonebridge’s Nic Hage, Rorey James and Kevin Tong were the agents both times.
This campaign was on behalf of receiver Newpoint Advisory.
The deal comes just over two years since Angelo Property Group and Rathstation Group outlaid nearly $30m – a seven per cent fully let return – for the neighbouring Mornington Village Shopping Centre, with 7963 sqm on 1.31 hectares, zoned Commercial 1.
A c$150m revamp with airspace residential is expected longer-term (story continues below).
Six of eight suitors own local: agents
Eight private investors contested for Barkly Square – or 53-55 Barkly Street – which, unlike the 2021 campaign, was not offered as nine strata pieces.
Three suitors were local, the balance, including the buyer, sourcing Asian capital, Mr Hage said.
“Value in the current market is clearly recognised with eight bidders competing,” he added.
“Further to this, six of the eight groups were existing owners of Victorian retail assets, highlighting a level of confidence in the direction of the ‘strip retail’ sector,” according to the executive.
Barkly Square also fronts Barrett Lane and Waterloo Place.
Seaside Mornington is 46 kilometres south east of Melbourne’s CBD.
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