Former Rothschild Australia chairman Peter Griffin has doubled his money on the Mornington Peninsula after selling the Country Road store on Sorrento’s Ocean Beach Road for $7,125,000.
The 1905-built Post and Telegraph building, which Mr Griffin bought just over four years ago for $2.53 million and then spent $1 million converting into a retail outlet, sold to a Melbourne family on a yield of 3.6 per cent.
With a lease to Woolworths Holdings-owned Country Road running until 2022, the retail premises sold on a land rate of $10,000 per square metre – highlighting the strong investor appetite for bricks-and-mortar retail in upmarket locations such as Sorrento, despite the growth of online retailing.
The winning bid was about a $1 million over the reserve – the property was called on the market at a bid of $6.2 million – and more than $2 million above the $5 million-plus figure CBRE selling agents Rorey James, Mark Wizel and Bianca Butterworth had quoted when 10-16 Ocean Beach Road was put on the market in January.
Mr Griffin, the former president of the Victorian Cancer Council, was among the crowd of about 250 who watched as the hammer fell. Also watching on was Melbourne property developer Colin De Lutis who owns the Mitre 10 further up the road.
Bidding started at $4.5 million through auctioneer Paul Tzamalis of The Auction Company. The next bid at $6 million knocked out many interested parties before three bidders duelled it out to final winning bid of $7,125,000.
Mr James said that with a long-term lease and heritage protections in place, the Sorrento Country Road store was the first test of appetite for a truly passive retail property investment on the peninsula. “It passed with flying colours,” he said.
“The new owners intend to hold the property for many generations. It’s in great condition so they won’t have to spend a penny on it for many years.”
Commercial land values in Sorrento have recalibrated in recent years on the back of exceptional auction results, including the 2016 sale of the Mitre 10 at 80-98 Ocean Beach Road to Mr De Lutis for $11.47 million on a yield of 0.4 per cent.
In November, the historic Peninsula Cinemas at 26-36 Ocean Beach Road owned by Village Roadshow founders the Kirby Family, sold for $5 million on a 4.6 per cent yield