Reserve price smashed by 36% at hotly contested Sorrento auction
The Sportsgirl building in Sorrento has been sold under the hammer for $4,070,000 at a hotly contested auction, which smashed the vendor’s reserve price by 36%.
Eight bidders battled it out for the 54-56 Ocean Beach Road property, with the strong sale price translating to a sub 3% return and a building rate of over $22,000/sqm – a new record for the popular shopping strip.
It is the 4th consecutive year CBRE has auctioned a commercial property inSorrento on the Labour Day long weekend, with over 200 spectators turning out for the event.
From an opening bid of $2,500,000, the reserve price of $3,000,000 was quickly exceeded. The property was strategically called onto the market at $3,250,000, which reignited the momentum of the auction and saw three new groups (including the eventual purchaser), take part in the process.
CBRE’s Rorey James, Mark Wizel, Nic Hage and JJ Heng steered the auction, which attracted significant enquiry from locals and holiday home owners, as well as bidding from two internationally-based parties.
“The strong bidding is a positive sign for the wider Victorian strip retail market, particularly given that there are only 2.5 years remaining on the Sportsgirl lease,” Mr James said.
“It highlights the depth of capital in the market seeking well-located retail investments, with the campaign generating significant from locals who either own a holiday home or live nearby. We’re also fielding increasing interest in Mornington Peninsula investments from offshore parties, such as the underbidder on Ocean Beach Road, who pushed the sale price up by over $200,000.”
CBRE’s Mark Wizel also noted that three of the bidders at Saturday’s auction had traditionally only been interested in residential property but were now moving into the commercial sector given the signs of weakness in the residential market. The Ocean Beach Road retail strip services the south-west tip of the Mornington Peninsula, notably Sorrento and Portsea – two of the most affluent suburbs in Victoria.
The sale comes just 10 days after the $2,600,000 sale of 69 Main Street, Mornington, also by the CBRE team. This property was also sold to a local investor on a yield of 3.6% and a land rate of $9,285 per sqm.