Retail action in the south-east

MELBOURNE'S south-east growth corridor has registered healthy new deals in the retail sector.

By InvestSMART · 26 Oct 2011

By InvestSMART ·
26 Oct 2011

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MELBOURNE'S south-east growth corridor has registered healthy new deals in the retail sector.

Fitzroys has completed a successful auction campaign in the Eve Central shopping centre, situated on the corner of William-Thwaites Boulevard and Glasscocks Road in Cranbourne North.

Eve Central, located in the Casey growth corridor, whose population is expected to swell to 375,000 by 2026, is a neighbourhood-based shopping centre anchored by an IGA and Chemist Warehouse.

The properties sold included four convenience tenants: shop 3, Shine@Eve (hairdresser), sold for $370,000 at a 7.2 per cent yield shop 5, Yum Yum Bakery, $670,000 at a 6.5 per cent yield shop 7, Chicken@Eve (charcoal chicken), $485,000 at a 6.85 per cent yield and shop 8, Off the Boat (fish & chips), $402,000 at a 6.86 per cent yield.

Kiran Pillai of Fitzroys, who handled the sales with David Bourke, said the properties received strong interest from small private investors and private superannuation funds.

Fitzroys also sold the ground-floor property at 76 Thomas Street, Dandenong, at auction for $456,000. The shop is leased to a hairdresser and is returning $36,000 a year.

It is located within the Arkana development, a mixed-use development by Deal Corporation that incorporates serviced apartments, office tenancies including State Trustees and Worksafe Victoria, and retail space.

The Department of Immigration and Citizenship has also leased 500 square metres in Arkana for three years, with a net effective rental of $290 per square metre. The department will take out level 4 of the building, which is now fully occupied. Andrew Field from Jones Lang LaSalle negotiated the deal.

Other recent activity in the Dandenong office precinct has included the Chisholm Institute committing to 1600 square metres at 311 Lonsdale Street and Uniting Care leasing space on Princes Highway.

Mr Field said tenants were looking at central Dandenong with fresh eyes. "This is one of the few opportunities in the south-east office market that still has attractive rents and access to the major south-east rail hub," he said.

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Frequently Asked Questions about this Article…

What retail assets did Fitzroys sell at Eve Central in Cranbourne North and what prices did they fetch?

Fitzroys completed an auction campaign at Eve Central in Cranbourne North, selling four convenience shops: Shine@Eve (hairdresser) — $370,000 at a 7.2% yield; Yum Yum Bakery — $670,000 at a 6.5% yield; Chicken@Eve (charcoal chicken) — $485,000 at a 6.85% yield; and Off the Boat (fish & chips) — $402,000 at a 6.86% yield.

Why is Eve Central in the Casey growth corridor attractive for retail investors?

Eve Central is a neighbourhood shopping centre in the Casey growth corridor anchored by an IGA and Chemist Warehouse, and it sits in Melbourne’s south-east where the local population is expected to swell to about 375,000 by 2026 — factors that support foot traffic and long‑term retail demand.

Who showed interest in the retail lots at Eve Central and what types of buyers were active?

According to Kiran Pillai of Fitzroys, the properties attracted strong interest from small private investors and private superannuation funds, indicating demand from everyday investors and self-managed retirement vehicles.

What yields did the convenience-tenancy sales deliver and how are those yields presented?

The convenience-tenancy sales at Eve Central were quoted with net yields: Shine@Eve 7.2%, Yum Yum Bakery 6.5%, Chicken@Eve 6.85% and Off the Boat 6.86%. These figures were reported in the auction results as the income return relative to the sale price.

What is the Arkana mixed-use development in Dandenong and which tenants occupy it?

Arkana, developed by Deal Corporation, is a mixed-use project in Dandenong that incorporates serviced apartments, retail and office tenancies. Office occupants include State Trustees and Worksafe Victoria, and the Department of Immigration and Citizenship has leased 500 square metres (three years) at a net effective rental of $290 per square metre — taking level 4 — making the building fully occupied.

What was the result of the auction sale at 76 Thomas Street, Dandenong?

Fitzroys sold the ground-floor retail property at 76 Thomas Street, Dandenong, at auction for $456,000. The shop is leased to a hairdresser and is returning $36,000 a year in income.

What recent office leasing activity has been reported in central Dandenong?

Recent activity includes the Chisholm Institute committing to 1,600 square metres at 311 Lonsdale Street and Uniting Care leasing space on Princes Highway. Andrew Field from Jones Lang LaSalle said tenants are reassessing central Dandenong because of attractive rents and access to the major south‑east rail hub.

What are the main takeaways for everyday investors from the south‑east Melbourne retail and office market activity?

Key takeaways from the article: the south‑east growth corridor is recording healthy retail and office deals; neighbourhood centres like Eve Central benefit from anchor tenants (IGA, Chemist Warehouse) and strong population growth forecasts; auction results show solid yields that appealed to small private investors and private super funds; and central Dandenong office demand is rising thanks to competitive rents and rail‑hub access, supported by government and education leases.