Investment Frenzy Heats Up in Glenferrie Road, Hawthorn

Small private investors are underpinning a dream run in high street shop sales in Melbourne, paring back yields even as Asian buyers take a back seat.

Last year’s strong investor interest in stand-alone retail assets, driven by low interest rates and competition from offshore parties, has gained momentum ahead of the close of this financial year.

Much of the heat in the sector was concentrated in the city’s eastern suburbs where intense competition and cheap debt has pushed yields to unprecedented levels, in some cases below 2 per cent.

A small shop at 719 Glenferrie Road leased to Flight Centre, leased on a fair market-led rent, sold on a yield of 2.89 per cent in front of a 100-strong auction crowd, Gorman Commercial’s Stephen Gorman said.

Mr Gorman believes the $3.18 million price was a record for Hawthorn’s Glenferrie Road shopping strip.

The auction was also unusual in that Asian investors weren’t bidding, Mr Gorman said.

“Apart from an exceptional result, it was very obvious the active Chinese investors usually bidding at auction were missing today. While the Asian interest was strong, we had no bidding from this sector of the investment community.”

“We don’t expect this to continue, but it was the first time we have seen this in the last two years in Glenferrie Road, which surprised us”, he said.


The Age: Published 15 June 2016, Simon Johanson

Twitter: Another strong write up in The Age highlighting our recent auction in Glenferrie Road