Coastal retail strip hits record with $6m+ property deal

A record price for a commercial property in Ocean Grove’s main retail centre has underlined the growing demand for regional assets.

A local private investor has paid $6.55m for a collection of eight tenancies over nine titles at 65-67 The Terrace and 6-9 Park Lane, Ocean Grove.

Darcy Jarman Geelong agent Andrew Prowse said the conglomeration of properties, which delivers a net annual income of more than $380,000, plus GST, had attracted interest from local, Melbourne and interstate parties.

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The tenanted investment was offered in an expressions of interest campaign that drew four offers and sold at a 5.8 per cent yield.

“Importantly from our perspective, interest from not just the Melbourne and Geelong market but also groups inspected from Sydney and we had a group fly down from Brisbane,” Mr Prowse said.

“To have that sort of coverage for a regional asset, and that level of engagement, is really positive.”

The Geelong-region buyer already owned holdings through the Bellarine Peninsula and Surf Coast,” Mr Prowse said.

The underbidder was a Melbourne-based investor, he said.

“He’ll look to slowly realign rents over the next five to 10 years,” Mr Prowse said.

“He felt in particular that there was an opportunity for him to realign some of the rents in the years to come.

“Ultimately the opportunity to buy almost 1000sq m of land in The Terrace was too good for him to pass up.”

The Terrace is the main CBD shopping strip in Ocean Grove, three blocks from the surf beach.

Cotality records show the most expensive commercial property sale on the strip was $3.8m.

“There is a scarcity of commercial land through the Bellarine Peninsula and Surf Coast and certainly these opportunities don’t come on the market,” Mr Prowse said.

“If they do, there’s just a long term appeal to be able to grab a parcel of that size as that might not happen for a nother couple of years, maybe another half-decade.

“I’m a huge fan of The Terrace and a big fan of Gilbert St, Torquay – the traditional retail pockets that we have down on the Surf Coast and the Bellarine.

“Personally, there as good as it gets in the Geelong market for long-term growth potential.

“They are absolute A-1 position that’ll always enable you to have really good tenants and you can service both the tourism but also the local demographic.”

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