A ROSY investment future for central Geelong property has cemented a multi-million deal for a landmark at the entry to a trendy CBD precinct.
A Melbourne investor has signed a $6.9 million deal to secure a 900sq m property at the corner of Moorabool and Little Malop streets.
The tenanted investment at 114-122 Moorabool St achieved a 5.1 per cent net return, Geelong Commercial agent Neville Richards said.
The property was on the market for a period of time during year’s Covid lockdown, but attracted some pretty solid inquiry once the main lockdown in Melbourne had lifted.
“We had a few locals look at it, but the sale was mainly driven by external interest,” he said.
The property, which has three street frontages, including Shorts Place where a huge mural adorns its brick wall, attracted some interest last year.
“A few people were putting in offers around the mid $6 million, which wasn’t quite going to get the job done,” he said.
The property returning up to $365,000 a year from a mix of tenants.
“They are looking for income, but are also looking for income with potential future upside,” he said.
“They wanted to establish a developable footprint in the Geelong CBD.”
Buyers are eyeing Geelong for its investment potential and land-banking.
“I still think the CBD is a bit of a contested area at the moment, because there is a bit of uncertainty about what can and can’t be done.”
The development sector is facing a uncertainty after the State Government launched a review of the CBD planning rules.
The draft Central Geelong Framework Plan includes limits on building heights to 21 metres or seven storeys and street wall heights to 12m or three storeys on the city’s main streets in the retail core.
“Buyers have got to see through that to some extent,” he said.
“It’s really a key site when you look at what’s going on in the Little Malop St precinct west of Moorabool St.
“What’s been created over the past five to 10 years in Little Malop St is going to continue, once things get up and running around the (Geelong Arts Centre) theatre and Bright and Hitchcock.”
Mr Richards said the Little Malop St mall also had great potential, although it’s going to be a challenge for the owners of Market Square to activate the north side of mall.
Melbourne-based developers were seeing good to mid to long-term investment potential in Geelong.
“Investors say if Geelong is growing and population is growing and investment in accelerating, that means there is going to be capital growth,” he said.
“Over the next 15 to 20 years, I don’t think there’s any better bets in the country when you look at similar satellite cities outside Sydney and Brisbane.
“They are booming everywhere, Geelong in particular has been doing it for three to five years and Covid has accelerated that.
“What’s different about Geelong is it’s on a north-facing bay, you’ve got the beaches on the Surf Coast and you’ve got the Bellarine.”