Historic Chapel Street asset listed for auction after nearly 170 years
Owned by the Prahran Mechanics’ Institute since the 19th century, the fully leased retail property at 259-261 Chapel Street, Prahran, is expected to attract strong investor interest as Chapel Street continues to evolve.
The offering is leased to DailyJocks, Connection Perfumes + Gifts and Bennett’s Fitness, and is selling through an on-site auction next month.
“This is the first time the property has ever been offered to the market,” says Fitzroys associate director Lewis Waddell who is brokering the sale alongside David Bourke director at Fitzroys and Peter Lane, director at Lane Commercial.
“It has remained in the ownership of the Prahran Mechanics’ Institute throughout its history, which makes this an exceptionally rare opportunity on Chapel Street.”
The two-storey property comprises about 602 square metres of floor space across three tenancies and occupies a 366-square-metre site with a frontage of 15 metres and rear access.
The building is fully leased, producing a combined annual income of $184,550 plus outgoings.
Waddell says the property offers investors an established income stream alongside the opportunity to improve returns.
“The property is fully leased to three long-standing tenants, providing income from day one, while the current rental profile presents scope for uplift across the tenancies,” Waddell says.
“That combination should appeal to passive investors seeking an established Chapel Street holding, as well as value-add buyers looking to actively improve the asset.”
The property’s Activity Centre Zone 1 designation and rear access also provide longer-term development potential, subject to planning approval. Surrounding developments of up to nine storeys demonstrate the changing scale of the Chapel Street precinct.
A storied Chapel Street history
The property’s history gives the campaign a unique selling position. The Prahran Mechanics’ Institute was established in 1854, with its original building at the Chapel Street site officially opened by Victorian governor Sir Henry Barkly in 1857. It served as Prahran’s first library service and the first meeting place of the Prahran council.
Its history also includes an unusually dramatic property dispute. According to the library’s records, institute secretary W. J. Allen refused to leave his upstairs residence after being dismissed in 1868. The committee ultimately had part of the roof removed to make the residence uninhabitable.
The original building was demolished and replaced with the present commercial building in the early 1900s. When the institute moved its library and educational operations to High Street in 1915, the Chapel Street premises were leased commercially, providing income that helped support the organisation.
Surrounding development and growth
The campaign is taking place amid substantial development activity along and around the strip, including projects by Gurner, Banco Group, Vicland and Kincrest.
“Chapel Street is entering a significant period of growth,” Waddell says.
“The major projects under way or planned nearby are set to transform the precinct and bring a substantial increase in the local population. That growth should provide further support for retail, hospitality and commercial activity along the strip.”
The property will be auctioned on-site at 1pm on Thursday, August 13, and a price of $3 million plus is anticipated.
