Dawkins Occhiuto directors Andrew Dawkins and Walter Occhiuto are marketing the site with former CBRE colleagues Justin Clarkson and Scott Orchard. The agents wouldn’t comment on price but local industry sources expect the site will again fetch about $25 million, or about $7068 per square metre of land.

In the area in May, private builder Little Project Developments paid Sydney-based developer Stockland $22.5 million for a 2150 square metre development site at 2 – 4 Yarra Street with a permit for a 350-unit complex of about 30 levels. Stockland paid $26.5 million for the Yarra Street site in 2008.

Any redevelopment will better exploit the site’s massive 65 metre frontage to Chapel Street, which commands the highest retail rents outside of the CBD.

The speculated sale price, which equates to $7068 per square metre of land, is bad news for other developers trying to offload major South Yarra development sites.

Sydney-based developer Stockland is likely to be re-assessing the value of its 2 – 4 Yarra Street development site, nearby. Purchased for $26.25 million in April 2008 (during the economic downturn), Stockland listed the site for sale a year later – after a major change in strategy saw it focus less on apartments, and more on low density suburban housing.

Stockland’s 2146 square metre block, which is advantaged by having a permit (for a 27-level, 332 unit complex), is now speculated to be worth less than $20 million, according to sources.

The Deague family is also trying to sell a 3037 square metre South Yarra site at 4 – 10 Daly Street. This site has a permit for a 13-level hotel, but the family’s development company, Asian Pacific Building Corporation, has abandoned its original plans to redevelop.

Coincidentally, both these developers have cases pending with the Victorian Civil and Administrative Tribunal to substantially boost the height of these proposals – Stockland’s to 35 levels, and APBC’s site, to 18 floors.

South Yarra’s biggest recent major sale occurred in August when private investment group Zig Inge paid nearly $18 million for an office at 199 Toorak Road. A neighbouring 908 square metre potential development site, in Claremont Street, was offloaded by the same vendor and fetched $6.5 million.

Metier was a minority shareholder in a Docklands building that recently sold for $240 million.

All up there is 2372 sqm of area.

Fully let, the property could return annual rent of $775,000, meaning the asset sold on a six per cent market yield.

Gross Waddell directors Michael Gross and Jonathon McCormack and Teska Carson director Michael Ludski marketed the 1914 art deco arcade at 245 – 253 Chapel St (story continues below).

There is scope for the new owner to sell down the retail component as strata titled investments, and develop either apartments, or offices, within the current building and into what is airspace above the third (top) level.

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Many migrants and baby boomers furnished their first homes with budget furniture sold from the emporium.

But with the new century, comes change.

Now, the upstairs internal areas of the former showroom will be reconfigured as high-end New York Style loft apartments. A vacant tract of land fronting High Street will also be developed into flats.

In all, the H on Chapel project will include 12 units, starting in price at $340,000 for a one-bedroom flat, of which there are 11.

Look Property Group director Bryce Patterson is marketing the development.

“Bridge Road suffered a spike in vacancy last year as a result of the new DFO in Spencer Street,” said Knight Frank retail leasing and sales executive Jamie Perlinger. “Since then however, the strip has attracted a number of independent fashion outlets. Vacancy fell from 3.91 per cent in March to 0.87 per cent today.”

“This is Bridge Road’s lowest vacancy rate in several years and the lowest of all strips covered.”

“Fashion retailers now account for 73 per cent of the tenant mix in Bridge Road, with new tenants including Easy Tiger, Creswick and Charmie,” said Mr Perlinger. “It seems anywhere there’s a high proportion of fashion, vacancies are generally low.”

Burke Road in Camberwell was the only other strip to record a sub 1 per cent vacancy, staying steady since March at 0.97 per cent. It was followed by Acland Street St Kilda (1.01 per cent), Church Street Brighton (1.27 per cent) and Glenferrie Road Malvern (2.02 per cent).

Chapel Street came in sixth position, recording a vacancy rate of 2.17 per cent, down from 2.77 per cent in March. “Chapel Street has the second highest proportion of fashion retailing at 52.1 per cent of the total,” said Mr Perlinger.

The strips with the highest vacancy include High Street Armadale (3.77 per cent) and Toorak Road South Yarra (7.47 per cent). The only strip to record to a rise in vacancy was Puckle Street in Moonee Ponds. Vacancy in the precinct increased from 3.79 per cent in March, to 4.88 per cent in June.

Mr Perlinger says that vacancy levels of less than 5 per cent are considered healthy for prime suburban strips.

“In terms of rents, Chapel Street South Yarra still commands the highest at up to $1300 per square metre, while nearby Toorak Road was amongst the cheapest, averaging between $400 and $700 per square metre.”

According to Mr Perlinger, tenants wanting to get into the bourgeoisies south-east suburbs, still elect for stores on Chapel Street over Toorak Road.

Knight Frank research says investors shelled out $69.9 million retail property strip assets in the 2006/07 financial year. This compares with $20.5 million recorded for the previous year.

“Strong tenant demand, and low vacancies are continuing to attract private investors to suburban strip retail,” said Knight Frank research analyst Randy Jayakody. “This competitive environment is seeing yields consistently in the 3.5 per cent to 4.5 per cent range”

The two-level building, with ground-floor shops, was sold by developer Vicland for what is believed to be more than $10million.

Last year, Vicland sold an office building at 422 Little Collins Street to Becton for more than $22 million.

The Chapel Street development is Watpac’s first Melbourne venture.

Gross Waddell director Jonathon McCormack brokered the sale and is marketing the project, which is expected to start construction next year.