City sales a positive sign

GEELONG’S commercial property market is showing positive signs with more interest from prospective buyers in and out of the region, according to an agent. Darcy Jarman auctioneer Tim Darcy said buyers were often seeking to make speculative investments on properties offering good rental yields. Mr Darcy said more competition from prospective buyers showed that investors from in and out of the region had recognised the excellent value offered in Geelong’s central business district.

Last month Mr Darcy sold a 865sq m property with 860sq m of floor space occupied by the Community Care Chemist at 16-18 Malop St, Geelong, sold after passing in at around $1.4 million. “It was on the market at $1,575,000 and sold privately close to this price to the buyer it was passed in to. “The purchaser bought the property as a speculative investment with a view to occupying later in some shape or form,” he said. However, Mr Darcy confirmed that the Business 1 zoned property was sold with a partial leaseback arrangement with the Community Care Chemist, which was selling the building. “They will continue to short-term lease for around $35,000 per annum plus outgoings for the first floor for their office and administration as they have vacated the ground floor to relocate to Pakington St. We will be looking for a ground floor tenant shortly,” he said. “There are certainly people out there ready to buy the right property in the right circumstances.”

Fellow agent Simon Jarman said the auction sale of a strata titled office complex at 1/73 Malop St, Geelong for $575,000 indicated the buoyancy of the commercial market. The property was sold to Mayor Darryn Lyons’s company, The Big Group, which made the purchase as an investment with an 8.3 per cent yield. Mr Jarman said the property was leased for $48,000 per annum, which resulted in a rent of about $133sq m. He said there was no comparison between a first-floor property and a ground floor freehold property. “The ground floor will always attract a tight yield as they have street frontage and more exposure,” he said. “This is a strata property and is part of a body corporate, so these types of property ownership generally yield better than a freehold owned property.


From the Geelong Advertiser, 8 October, 2014.