The landmark Carmel at Sorrento building along Sorrento’s famous Ocean Beach Road has changed hands for in excess of $10m, marking the first commercial transaction in two years for the acclaimed retail strip and the largest campaign in over a decade.
Stonebridge Property Group’s Nic Hage, Rorey James & Kevin Tong handled the sale of the going concern luxury accommodation offering, a 1,500 sqm approx. building that comprised 7 apartments and three retail spaces. It is understood that the property transacted for $10,150,000 which reflects a net yield of ~2.35% and land rate of $12,069 per sqm, both very strong parameters indicating a swing in confidence towards the Peninsula destination. The property was purchased by the investment arm of a Melbourne based family office, The Vavasis Family Group, who saw the asset as a strategic acquisition to their portfolio given the underlying value in the improvements.
Mr Vavasis noted “Our background is in development and we understand the cost to build an asset like this, and whilst the return is nominal, we see value in the asset due to the positive arbitrage in replacement costs and the upside in a future subdivision/sell down.”
Stonebridge Director, Nic Hage noted, “The international expression of interest campaign culminated in 8 first round offers from various buyer profiles – interestingly two of the top 3 groups were traditional developers looking to diversify.”
Interstate and offshore groups also participated in the process, with the quality of the Ocean Beach Road retail precinct a major attraction. Over the past 10 years, since the landmark transaction of Mitre 10 Sorrento, Stonebridge’s agents have handled 11 of the past 12 transactions, with 72% purchased by Melbourne based investors.
"Sorrento continues to be regarded amongst the most desirable Victorian retail precincts for investment, on a national and local scale. The continued growth in the quality of the tenants, historically low vacancy rates and affluence of the surrounding suburbs provide a high level of confidence.”
The sale of 142-146 Ocean Beach Road, Sorrento is the third $10+ million Strip Retail Investment transaction handled by the Stonebridge team in the past 5 weeks – following the sales of Dan Murphy’s Balwyn & Fargo & Co Richmond.
Stonebridge Partner, Rorey James added “We are witnessing increased investment activity across the wider investment market, driven largely by growing market sentiment and urgency to allocate capital prior to an expected increase in competition throughout 2025. To have 3 properties transact in excess of $10 million in the last 6 weeks alone displays investors’ long-term confidence in the Victorian investment market and the buying opportunity present right now."
Also in the Mornington Peninsula, Stonebridge recently sold the Bank of Queensland building in Mount Eliza. The freehold investment with 8 years of remining tenure saw bidding from 6 groups, before being knocked down to a Melbourne based buyer. The final price reflected a net yield of 3.6%.
