A surge of COVID-19 sea changers moving to Victoria’s Mornington Peninsula is driving a mini-boom in commercial real estate, with many relocating their businesses or choosing to start up new ones.
As a result, the stock on the market – particularly of industrial units and retail premises – is now in short supply, prices are rising and the number of days on market is contracting dramatically.
“It started last year and we didn’t see it coming at the time,” said Peter Skewes, manager at Jacobs & Lowe Real Estate, which just leased eight properties in Mornington and Mount Martha in one week, for rents of up to $9300 per month. “But we’ve been very, very busy and it’s continuing.
“Mornington in general is a very popular place to live and work, with great schools, hospitals, shopping, golf courses and fantastic beaches, and COVID has helped accelerate the shift here.”
One of the premises he leased was an old warehouse-style shell on Blamey Place to chef Sean Flanagan. He undertook a stylish fit-out and opened the cafe Wildgrain Mornington, now among the most popular eating spots on the peninsula.
During the lockdowns Mr Flanagan ended up delivering home-cooked meals to customers’ homes, but he’s now extremely busy.
“A lot of people are moving here, and it’s been a very busy summer,” Mr Flanagan said. “Things are going very well, although all the hospitality venues on the whole peninsula are looking for staff. It’s incredible.
“But there’s a different feeling in the air now, and we’re making hay while the sun shines.”
A number of other interesting commercial properties are coming up for sale now and have been luring more investors to the area. Mornington’s sole cinema, for instance, is up for sale in a prime position on the peninsula’s premier shopping strip, at 1 Main Street.
With a price guide of around $3 million for the April auction, the 568-square-metre building has been with the same owner for 39 years but it shut at the start of the pandemic and now the curtains have closed on it forever.
“There is some history there and it’s always been very popular with the locals,” said Jeremy Lewis, also of Jacobs & Lowe. “We’ve been receiving a lot of inquiry as there’s potential to redevelop it into full retail or apartments. It’s an open book, this one.
“But everything is selling so quickly here, with both retail and industrial doing incredibly well, although office space is less busy with current COVID restrictions on the number of people who can go back to work. In retail, though, we had 27 vacancies in the Mornington retail market mid-last year, and today we have two. And if we had more industrial stock, we’d be able to sell it immediately.”
An industrial property Mr Lewis recently sold in Mount Martha was on the market for just 10 days, and he’s receiving good interest on a 1000-square-metre warehouse space he has at 6 Elite Way, Mornington, for sale at $1.923 million.
Storage spaces in Mornington are also in huge demand as more and more people move down from Melbourne and the Bayside area, and they want space for cars, boats and business equipment while they find premises to lease or buy.
“The market is out of control!” said James Roux of agency Cameron. “The residential move here is certainly fuelling the commercial property market and people then want to relocate their businesses here or start new ones and, with interest rates so low, it’s helping create a huge demand, with people itching to get started.
“Others are buying property out of their super and leasing it back to themselves. A lot of them are working from home, but they often also need a business presence, or if they’re working online they still need premises.”
There’s also a retail complex at Mornington due to be auctioned – the nine-shop Barkly Square, the only retail island site in the area. On a landholding of 2029 square metres, it’s a mortgagee sale being handled by the Stonebridge Property Group’s Rorey James, with interest north of $8 million.
“This centre previously went to the market in 2019 but now this time, we’ve received double the number of inquiries,” said Mr James. “There’s now a real lack of property available for buyers and now any income-producing properties are getting heavy interest as a better alternative than keeping money in the bank or with bonds.
“The majority of inquiries we’re receiving are from the peninsula and from Melbourne, although we [have] also heard as far afield as a syndicate of buyers from Sydney.”
Tom Crowder of Nichols Crowder has been marketing the retail centre in conjunction with Stonebridge and says the level of inquiry is indicative of the level of activity on the peninsula as a whole.
“There’s a huge number of people looking at Mornington Peninsula now that we’re coming out of COVID because they want a little more space and a seaside location,” said Mr Crowder, who’s also selling 10 Elite Way, Mornington with an asking price of $2.446 million.
“They want to live here and also work here, and are looking at retail, industrial and commercial. We are absolutely overwhelmed.”
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