The removal of Victoria’s “ring of steel” dividing metropolitan Melbourne and the regions is already boosting inquiries for commercial properties in many regional areas, according to agents.
The checkpoints were removed in the first week of November as part of a broader easing of restrictions, representing the first time in months that Melburnians could travel to regional cities such as Geelong, Ballarat and Bendigo.
Stonebridge agent Justin Dowers, who is selling a Woolworths building in the seaside town of Torquay, on Victoria’s Surf Coast, said the effect of the eased restrictions had been keenly felt.
“Essentially the flood gates are open, which is great. It is having a two-fold effect, first it is great that we can inspect on-site with parties, which encourages their participation,” Mr Dowers said.
“[Second] Torquay in particular is [now] very busy, on any day and at any time. So, when we inspect with Melbourne-based groups and they see the activity within Torquay, it gives them confidence that they are backing a winner.”
The COVID-19 pandemic was already having a knock-on effect in markets such asTorquay, about 100 kilometres from Melbourne.
“The ‘work from home’ and ‘tree-sea change’ trends are encouraging for population growth and positive demographic shifts,” Mr Dowers said. “This is giving investors a lot of confidence to invest in these regions.”
The Victorian government’s recent announcement that it would be bringing forward stamp-duty concessions for commercial properties in regional areas was “another win” for regional markets.
“The stamp duty concession is then just another push for investors to look outside of metropolitan Melbourne. We anticipate that yields paid for regional properties will be at or close to that of metropolitan Melbourne,” Mr Dowers said.
But buyers on the hunt for an “essential-services” asset at a bargain price would likely need to look elsewhere, with Mr Dowers expecting Woolworths Torquay Central, which has a price guide of “$20 million-plus”, to attract fierce competition.
“The Woolworths in Torquay will be priced similar to that of a metropolitan asset. Premiums are generally paid for metropolitan assets because they have valuable underlying land. But that is exactly what Woolworths Torquay has. Our estimate for Woolworths Torquay is the underlying land would equate to above 90 per cent of the capital value. That gives confidence to buyers that over time, the land will gradually become very valuable and promote consistent capital value escalation,” Mr Dowers said.
He and colleague Kevin Tong are selling the 7332-square-metre site, on the corner of Bristol Road and Walker Street. It is zoned commercial 1 and has four street frontages. The freestanding building includes a BWS store and is leased to late 2024, with further options and a passing net income of $916,029.
Mr Tong said the property stood out for its future mixed-use development potential, owing to its substantial land size and 300-metre distance to Torquay beach.
“We are not simply talking about a recession-proof income stream from a blue chip tenant, but a property which also offers exceptional development prospects down the track at the gateway to the Great Ocean Road – one of Australia’s foremost tourist destinations,’’ Mr Tong said.
Woolworths Torquay Central is for sale by expressions of interest closing on Thursday, December 3.
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