Geelong’s ‘island’ site with upside scores dream sale price
The island site at 179-185 Little Malop St, Geelong, has sold for $8.875m.
A central Geelong island site driving a near-$500,000 annual rental income scored a huge sale price after flushing out competition from five bidders.
The Little Malop St property sold for $8.875m – at a 5.1 per cent yield – to a Melbourne-based investor who outbid local, Victorian and national contenders to secure the 1830sq m site.
Darcy Jarman Geelong agent Andrew Prowse said the standout result was a vote of confidence in Geelong’s central business district.
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“We were blown away by the level of engagement,” Mr Prowse said.
“Over 150 inquiries and five expressions of interest were lodged unconditionally resulting in an exceptional result given the quantum in the yield.
“The underbidder was based in the northern beaches of New South Wales.
“Our CBD continues to attract a lot of interest. It is really important that external private money is being invested here because they see the value and are putting their money where their mouth is.”
The buyers were attracted to the diverse $460,000 annual income, with Chemist Warehouse, Executive Apartments and Kelly’s Accountants, holding long leases with the weighted average lease expiry hitting eight years.
“Everything was underpinned by what is a pretty unique landholding in one of the best locations in the CBD,” Mr Prowse said
The development upside of the block with four street frontages could be unlocked “in many years’ time, he said.
The island site has big development prospects that can be unlocked in many years time, but others, such as the Geelong Convention Centre, are building now in Geelong’s CBD.
“I think the people we are dealing with understand the value (of Geelong). It’s not what they’ve paid today, whilst it is a significant quantum,” Mr Prowse said.
“We have a lot of confidence in the CBD with everything that’s going on and what’s likely to occur in and around this particular property and those around it.
“It provides some comfort that there’s going to be investment from all levels – private, council and state funding and that could unlock some significant value growth in the land, which this particular purchaser is aware of.”
There is a growing number of permit-approved developments waiting to start in Geelong, with unfavourable economics surrounding to cost of building among the reasons work has yet to begin.
The Geelong Convention Centre is one of three major projects where construction is under way in central Geelong. Picture: Alan Barber
Major projects underway include the Geelong Convention Centre, Pitard Group’s build-to-rent social housing development in Myers St, and the Barwon Women’s and Children’s hospital tower.
Mr Prowse said proactive groups that had acquired sites were waiting for conditions to be right.
“The time will come and when it comes I think it will be a rush and those that are in and ready will be rewarded greatly,” he said.
“Those groups that we’re dealing with that have picked up sites are committed to the area.”
Mr Prowse said investors remain on the lookout in Geelong.
“There is now over $30 million in unallocated capital targeting Geelong’s CBD for future investments.”
