Melbourne-based property investment companies PodCo and Terraplex have continued the sell-down of the Emerald Hill Terrace portfolio, with two successful transactions and a third property confirmed for auction in July.
In the most recent transactions, a local investor purchased 338-340 Clarendon Street in South Melbourne at an onsite auction for $3.95 million. The 276sqm property has a short-term lease in place to Bendigo Bank.
Meanwhile, in an off-market process, a 184sqm retail/residential property at 342 Clarendon Street was purchased by a local investor for $2.175 million – reflecting a return of 3.8%.
PodCo and Terraplex acquired the portfolio in early 2015, and over the course of three years have subdivided the landholding into 15 separately titled retail/residential offerings.
Mr James commented on the recent sales results: “The result of Bendigo Bank, and the strong depth of interest received throughout the campaign, provides further confidence in Clarendon Street as one of Melbourne’s top performing retail strips. Having several groups miss out [on Bendigo Bank] worked in our clients’ favour, and as a result we were able to transact the neighbouring property, for a particularly sharp yield, on their behalf.”
PodCo Director, Anthony Wilson said the two companies took on the project, recognising the attractive investment attributes of South Melbourne.
“Direct access to the CBD, proximity to tourist attractions (South Melbourne Market & Albert Park Lake) and a development pipeline comprising over 1,800 residential apartments and over 90,000sqm of forecast office space makes Clarendon Street one of Melbourne’s most progressive locations and a hotspot for retail activity,” he said.
The next property to come to market as part of the portfolio sell down is 350-352 Clarendon Street, South Melbourne – a double fronted, multi-tenanted retail/residential property, comprising four apartments and two retail shops. The auction is expected to achieve a sale result in the high $3 million range.
CBRE’s Mark Wizel, who has been appointed to market the property conjunctionally with Dixon Kestles commented on the upcoming sale campaign: “The residential aspect is very attractive, South Melbourne is a desirable suburb and residential real-estate is in high tenant demand. Not to mention the median house price currently hovering around $1.5 million – there is a lot of value in four apartments.”
According to CBRE Research, South Melbourne & Clarendon Street retail vacancy rates have declined from 6.2% in Q1 2015 to 0.7% in Q2 2018. During the same period, yields have compressed by around 160 basis points.”