Local investor snaps up Sorrento corner
A prominent corner in the Mornington Peninsula’s premier retail precinct has been purchased by a local investor for $2.55 million.
On the corner of Melbourne Road in Sorrento, 174 Ocean Beach Road changed hands in a highly-competitive auction attended by more than 200 people over the Labour Day weekend.
The 232sqm landholding and double-storey building is currently home to The Boss’s Daughter café, on a five-year lease.
The sale represented a yield of 3.9% and record land rate for Sorrento of $11,000/sqm, clearing the previous marker of $9,500/sqm set by CBRE’s 2018 transaction of the Country Road store on Ocean Beach Road.
CBRE’s Melbourne and Mornington Peninsula Strip Retail Investments team of Rorey James, Mark Wizel, Nic Hage and JJ Heng managed the campaign.
“The campaign was well received and resulted in excellent buyer depth; five groups were bidding and another six pre-registered to bid but did not have the opportunity to raise their hand,” Mr James said.
“In the end, an investor from the Mornington Peninsula won out, noting he was tired of poor returns from the banks and drawn by the opportunity to get back into commercial property investment.
“It highlighted strong depth in capital for well-located, leased investments and a high level of confidence in the Melbourne and Mornington Peninsula strip retail investment markets.”
It was the fifth-consecutive year CBRE has sold an Ocean Beach Road property during the March long weekend, which typically draws significant numbers of visitors and tourists to Sorrento.
“The Mornington Peninsula is a playground for Melbourne’s elite, with many rich listers owning holiday homes in the area and returning to their ‘home away from home’ on weekends,” Mr Hage said.
“It wasn’t a surprise to receive interest from locals given the substantial wealth in the area, in this case four of the five groups that bid during the auction have residential ties to the Peninsula.
“Most of these groups viewed the property as an investment, however we also had strong levels of enquiry from high-net-worth families taking a longer-term view built around the acquisition of multiple assets over time.”
CBRE has handled the past eight transactions along Ocean Beach Road, notably the sales of the Sportsgirl and Country Road sites for $4.07m and $7.125m respectively and the Peninsula Cinema portfolio on behalf of the Kirby Family for $10m.
It will take another Sorrento asset to auction on April 4, a Commercial 1-zoned site at 854 Melbourne Road.
The 857sqm landholding shares a corner block with Tayton Place on the approach to Ocean Beach Road and is permit approved for a three-level retail and residential development.
“Over the past five years we have seen the Peninsula, and Sorrento in particular, increase in popularity as an investment destination,” Mr Wizel noted.
“Buyers are following the trend of popular retailers having a presence on Ocean Beach Road, and their ability to pay rents that rival metropolitan Melbourne’s strongest trading precincts.”