A fully leased strata retail investment in the Northland Homemaker Centre has been snapped up by a private local investor for $5.12 million.
The 1,080sqm retail suite was sold with a lease to boutique French provincial furniture retailer Maison Est.
CBRE’s Josh Twelftree, Rorey James and Ryan Arrowsmith negotiated the sale on behalf of a private local investor, who had deemed the current strong retail environment as the ideal time to sell.
Despite the strata nature of the asset providing some challenges, Mr Twelftree said the auction received strong interest from a range of local and offshore investors.
“The bidding opened up at $4 million and after 38 bids from four unique investors, including a Mainland Chinese group who was the under bidder, it was eventually sold for $5.12 million.”
The transaction was equivalent to a building rate of $4,741 per sqm and yield of just over 6 per cent - which Mr James said was a strong result given the property’s strata titled nature.
“The result is a good indication of the current buyer appetite for income producing retail assets, regardless of location. The record low interest rate environment, together with a lack of supply of these single tenanted retail investment properties, continues to attract an array of local and offshore investors.”
CBRE’s Large Format Retail team negotiated the last three leasing deals within Northland Homemaker Centre and has attributed its success to educating retailers about the location and in particular the gentrification of Preston.
“Young professionals are moving into the area, purchasing homes with the view to reallocate funds back into the property by renovating, interior decorating and redesigning the existing landscape of their homes. This trend has seen the area improve as a whole, and the demand for household goods in the area increase,” Mr Arrowsmith added.