“Albert Park Drycleaners trades hand to domestic Chinese investor”
Amid the COVID-19 global pandemic a domestic investor of Chinese heritage has secured an Albert Park investment for in excess of $1,800,000.
35 Victoria Avenue, Albert Park leased to Albert Parks longest standing Dry Cleaner (Master Dry Cleaners) has sold via an on-market process for in excess of $1,800,000.
CBRE’s Melbourne & Mornington Peninsula Strip Retail Investments team, Rorey James, Nic Hage & JJ Heng brokered the sale which was initially listed in February 2020.
CBRE’s Rorey James noted “The property was listed with the intention of a mid-April auction, however due to the restrictions put in place as a result of the COVID-19 pandemic, a change of strategy was required.”
According to RP Data the property was marketed for just 14 days before being converted to a private sale process on the 26th March and selling on the 1st May 2020.
JJ Heng of CBRE said “The on-market process saw 19 different groups inspect the property post the WHO’s COVID-19 Global Pandemic announcement and uncovered 6 groups who put forward formal offers, 4 based locally and 2 based overseas and required FIRB approval.”
“Ultimately the successful purchaser, a domestic investor of Chinese heritage, who secured the property on the basis of a strong unconditional position with short settlement.”
Records state that the property was initially purchased in 2003 along with the neighbouring property (33 Victoria Avenue, Albert Park) for a combined price of $1,130,000. The reported May 2020 sale Indicates that the savvy seller has traded out of just 50% of the initial acquisition for hefty profit of close to $700,000.
The May 2020 sale price indicates net returns of circa 4.0% and land rate of upwards of $11,000 per sqm.
CBRE’s Rorey James noted “The level of interest did not come as a surprise given the quality of the location and length of the lease, however it was recognised early on in the process that the substantial site contamination was going to be a hurdle we needed to overcome.”
“An all-encompassing bi-lingual marketing approach resulting in strong interest and importantly layers of formal offers assisted in building competitive tensions and ultimately found a buyer willing to take on the liability of the contamination.” Mr James Added.
“The vendor was very pleased with the outcome, achieving a result in excess of their initial listing price.”
The sale follows a string of investment transactions, including 170 York Street, South Melbourne for $2,050,000 and the off-market sale of 336 Clarendon Street, South Melbourne for $2,940,000.
CBRE’s Nic Hage noted “We are starting to see an increased level of positivity from sub $5m commercial property. The circa 30% drop in enquiry we saw in late March, early April has rebounded substantially, likely due to the increased stability of the stock market, announcement of potentially reduced social distancing measures and of course the record low cost of debt.”
Mr Hage added “To put this in context in the last 7 days we have seen 8 inspections including 2 revisits for an investment (Bottlemart) we are selling in Moonee Ponds, this is more than the month of April combined.”
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CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.