Chemist Warehouse key to Geelong ‘island’ site with upside
A Geelong ‘island’ property driving almost $500,000 in annual rental income, lead by Chemist Warehouse, offers new owners a mouth-watering upside.
A central Geelong island site where the tenants, including Chemist Warehouse, are locked on leased for up to 15 years, has hit the market with a mouth-watering income.
Darcy Jarman Geelong agents Tim Darcy and Andrew Prowse have listed the 1830sq m property at 179-185 Little Malop St, Geelong, via an expressions of interest campaign closing on March 19.
The property could attract interest over $7m, given its position in central Geelong, it’s secure tenanted investment status, and prices achieved for commercial real estate in the CBD.
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Three tenants generate a net annual income of more than $460,000, with the property’s weighted average lease expiry hitting eight years.
Chemist Warehouse is the major tenant of the property, paying more than $170,000 a year in rent on a five-year lease with two more five-year options.
Executive Apartments occupies a first floor at 181 Little Malop St, paying $142,000 a year, with Kelly’s Accountants paying more than $145,000 a year.
The property has four street frontages and has a broad Activity Centre zoning.
Mr Prowse said Chemist Warehouse and the Executive Apartments are on new five-year terms, while Kelly’s Accountants is 10 years into a 25-year lease.
“This structure ensures absolute certainty and long-term security for investors,” he said.
The location within central Geelong’s medical and retail precinct offered a long-term investment opportunity with a development upside as one of the only island sites of significant scale within the CBD, Mr Prowse said.
“Who wouldn’t want to own an island? The island nature of the holding is extremely unique and provides additional flexibility for any redevelopment or repositioning in the years to come, enhancing accessibility and activation potential,” he said.
“We expect interest from a mix of local, Melbourne, and interstate investors, as well as land bankers.
“At its core, this is a highly secure, diversified asset anchored by one of the market’s most sought-after lease covenants – Chemist Warehouse.”
Mr Prowse said the diverse income streams – commercial, residential, and retail/medical – make it an attractive investment.
“Secure leases are critical in today’s market, and with staggered lease expiries the property offers long-term certainty for any investor,” he said.
Two adjoining properties are already earmarked for development, including a substantial conglomeration of Malop St properties controlled by developer Up Property, highlighting the development upside for landbankers.
Mr Prowse said the opportunity will be offered in part or as a whole.
“We’re expecting groups will be around a yield of 5 per cent to 6 per cent for the asset, which given the security and unique elements associated to the offering represents exceptional buying.”
Originally published as Chemist Warehouse key to Geelong ‘island’ site with upside