May 05 2017Add to Favorites
May 5, Melbourne – One of the smallest commercial properties in operation outside of Melbourne CBD will test the market as small investors continue to seek alternatives to the hot residential market.
The sale of the 12-square-metre Kiosk 4 floorspace at the Northcote Plaza follows the successful sale in March of the even smaller eight square metre Repair Bee kiosk, also at the Plaza, for a healthy $401,500, or just over $50,000 a square metre, on a 5.1 per cent yield.
Kiosk 4 will be sold subject to a lease to a flower store expiring 2022 with a five year option at a current rental of $36,000 per annum.
According to marketing agent, Teska Carson’s Fergus Evans, the demand for commercial smaller property assets has risen markedly over the last 18 months as investors, who may normally seek residential and/or retail strip property, have sought alternative property investments as prices in the residential market continue to rise.
"We feel quite confident that the market will again deliver a strong result for the vendor.
"Kiosks are not your average real estate asset. They come up very rarely, consequently we have little sales history about which to gauge relative value. What we now know is that there is quite a lot of interest in this type of product especially from buyers who may require a lower entry point to the commercial market," Mr Evans said.
He said prospective purchasers for the Repair Bee kiosk, which attracted more than 50 enquiries, had mostly been first-time investors or investors looking to put something into their super fund. The store also sold subject to a 2020 lease expiry at a current $20,800 per annum.
Kiosk 4 benefits from its prime position in the middle of the entrance to the centre, and from strong foot traffic in a centre anchored by Coles and Kmart, along with 60 specialty retailers including national brands OPSM, Specsavers and Bank of Melbourne. The centre has 900 plus car spaces and operates with a catchment of five to six million customers per year.
Kiosk 4 will be auctioned on Wednesday, May 24 at 1pm on site.
SOURCE: Press Release
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With the combined influences of a cooling residential property market and heightened bank scrutiny on all aspects of real estate lending, traditional debt sources are, in many cases, closed to developers and commercial real estate investors, particularly where circumstances require a specific funding solution.
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