Ray White Commercial Glen Waverley has proved that the buoyancy of the Melbourne market is spreading to commercial real estate with the off-market sale of Bendigo Bank for $4.5m.
“Although the Melbourne suburban residential market continues to see strong results, this enthusiasm is not always translated into the Commercial market. It’s fantastic to see the strength of the Glen Waverley Commercial Precinct, surrounding Glen Waverley Train Station gaining momentum,” Ryan Trickey, Commercial Manager of Ray White Glen Waverley.
“Over the last 45 days there have been some excellent results in the area confirming that things are alive and well in the commercial - namely retail - property market.”
In the off-market sale, Mr Trickey sold the now super seeded Bendigo Bank at 75-77 Railway Parade, Glen Waverley for $4.5m, representing a return of around 2.92 per cent.
“This is a huge result. The sale price dwarfs the March auction result of 88 Kingsway for $3.61m, however this was returning a sharper yield at just 1.89 per cent,” Mr Trickey said.
Mr Trickey said that the Bendigo Bank sale doesn't fit “typical” investment profiles where buyers are often fixated on direct return on investment.
“There are other factors in play, in relation to use, permits and future potential. These are not as tangible as benefits expressed as a percentage but are equally as important.
“What this sale clearly shows is strong confidence in freehold purchases in the suburban market and further thought towards the idea of decentralisation of investments away from the Melbourne Metro and CBD.
“There are lots of things happening in Melbourne’s East and future planning taking place in the region. Ultimately, the Monash Municipal is next door to the centre of Melbourne and is becoming an attractive area for commercial investment,” Mr Trickey explains.
Mr Trickey attributes low interest rates and buyers that have been paying down debt due to uncertain market conditions, is assisting the sales process.
“There is limited stock available. Projects such as the Ikon Development sold 100 per cent off the plan in a number of days and that kind of result instils confidence.
“This linked with major competition from Asian buyer groups is allowing for successful off market sales like this to take place,” Mr Trickey concludes.
