The Commercial Property landscape in Melbourne's is experiencing considerable transformation as we proceed into 2024 as investors adapt to the tax changes of 2023. With a mix of long-held family assets entering the market and strategic investment shifts, presenting new opportunities.
Investment Strategy Shifts Towards Larger Assets
Investors in Melbourne's are currently adjusting their portfolios, moving away from owning multiple smaller properties to investing in fewer, larger-value assets. This consolidation is driven by the desire to manage land tax implications more efficiently and focus on asset classes that promise better long-term returns, such as retail and industrial properties.
Stabilising Interest Rates and Investor Activity
The stabilising of interest rates has injected some enthusiasm among key investors. With a keen eye for high-quality assets, there is a noticeable increase in activity, especially with properties that offer clear long-term growth potential. Blue chip properties have seen less competition allowing savvy investors to secure valuable assets with less opposition.
Featured Commercial Properties – For Sale / Sold
- Ivanhoe Medical Centre: Located on 1,780 sq meters of General Residential zoned land, this property generates $270,000 p.a. in gross rent and is expected to attract interest around a 5 per cent return.
- 176-178 Upper Heidelberg Road, Ivanhoe: This Commercial 1 zoned land is up for sale with vacant possession, anticipating around $2.7-2.8 million.
- 7 Rowe St Alphington: Set for auction in early May, this property benefits from a prime location opposite Alphington Train Station and houses the Alphington Social Club - a bar and , restaurant, returning $80,000 on a new five-year lease.
- 103-107 Lower Plenty Rd, Rosanna: This recently sold property, with blue-chip tenancies Australia Post and Rosanna Pharmacy, delivered a yield of approximately 5 per cent.
- Retail Developments: In West Heidelberg, four shops in The Mall (Heidelberg West) have sold with competitive and appealing price points. This reflects a healthy retail market that attracts diverse investments.
Leasing Update
The leasing market remains steady, with industrial properties performing well. The retail sector is also leasing well, particularly when solid incentives are offered to prospective tenants.
Advice and Looking Forward
Investors are encouraged to stay informed and connected as the market continues to evolve and adjust to the new taxes and interest rates. Our team are more than happy to have a confidential chat with you in respect to rent levels in certain locations or particular property issues you may be dealing with at present.
