‘Mum and dad’ retail investments trade on sub 6pc yields

The Glen Iris tenancies are leased to Hacker Australia.

Two modern sub-$3 million strata retail investments each side of Melbourne sold this week – for similar yields.

Hacker Australia pays net annual rent of c$167,000.

In Glen Iris, G01 and G02 of Ray Werdern’s recently completed Aintree apartment project at 1432-1436 Malvern Road traded for $2.788m – a 5.98 per cent return.

With 316 square metres and four car parks, it is leased to the local arm of German kitchen cabinet maker Hacker for five years.

The tenant picks up GST and outgoings.

“With more optimism about potential rate cuts in the second half of 2024, we are beginning to see more buyers emerge as they capitalise on softer yields,” Cushman & Wakefield’s Jeff Ha, who marketed G01 and G02, 1432-1436 Malvern Rd, with Raphael Favas, said.

Glen Iris is 10 kilometres south east of the CBD.

Doreen mini-mart fetches $2.4m

Meanwhile at Doreen – a growth corridor suburb 29km north east of town, a 388 sqm clear span supermarket, which might also be described as a mini-mart, traded for $2.4m – a 5.5pc yield.

The tenant – one of six Foodworks backed by the Manna Group – recently signed a 10 year lease with fixed three per cent rent rises (story continues below).

The Doreen mini-mart (outlined) contains 388 square metres.

It doesn’t pay land tax, but does cover other outgoings.

With options the business can stay until 2048.

The strata space forms part of the Vantage Centre at 49 Bassetts Rd, on the south west corner of Cookes.

“Investors have always been attracted to supermarkets as investments because of the ‘essential service’ nature of what they offer,” Burgess Rawson’s Shaun Venebles, who marketed the asset with Romanor Falconer and Jordan Bell, said.

“The result follows the recent sale of the Captain Cookes Fish and Chippery, the GnG Falafel and Frill and Crustic Pizza and Pasta in the same development,” he added.

“The fast food outlets sold for prices between $700,000 and $895,000 with yields averaging 5.5pc,” according to the executive.

The Doreen and Glen Iris properties traded to locals; the $2-$3m price point, agents say, popular amongst mum and dad investors.

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Marc Pallisco

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