Merri Community Health Services has recently snapped up a substantial Coburg building for $4.075 million, reflecting the current strength of Melbourne’s retail investment market.
CBRE’s Josh Twelftree, Rorey James and Scott Orchard, in conjunction with Michael Gross, Alex Ham and Benjamin Klein of Gross Waddell, negotiated the sale of the retail and office asset - which is located at 83-91 Bell St and 491-495 Sydney Rd, Coburg.
Positioned near the Coburg retail and lifestyle precinct, the 1,250sqm corner building has exposure to Bell Street and Sydney Road and is located nearby the Pentridge Prison. The site was positioned to the market as a value-add opportunity, with Activity Centre zoning allowing future development upside.
“Despite the property presenting a number of challenges - including lease tails hindering development potential and significant capital expenditure needed - we were able to give confidence to buyers surrounding the scope of refurbishment, potential of the area and demand for retail in the locale,” Mr James said.
Merri Health Chairperson, Carlo Carli, said the recent acquisition will allow Merri Health to provide a one-stop-shop for health services in Melbourne’s northern region.
“We are planning to construct a multi-level building on the site, which will see the integration and expansion of key health services in one location, giving northern residents access to advanced health support in their community. This will provide better opportunities for our community as we anticipate further job prospects and extended service,” Mr Carli said.
The sale price translates to a yield of nearly 3.4% - a strong result Mr Twelftree linked to continued investor confidence in Melbourne’s suburban retail market.
“Strong interest was received from local and offshore buyers throughout the campaign, with over 130 enquiries received.”
“With the Reserve Bank recently cutting interest rates to a record low of 1.50%, there has arguably never been a more affordable time to buy a commercial asset as evidenced by this strong sale,” Mr Twelftree said.
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About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.