Blue-chip investment offers future development opportunities
A premium service station opportunity in Melbourne’s upmarket inner-east is expected to attract both investors and developers alike.
The United service station at the corner of Chandler Highway, Princess Street and Earl Street in Kew provides a myriad of options to buyers, with long leasing options and the potential for development in its future.
The property, one of the city’s most trafficked suburban sites with more than 37,000 cars passing daily, will be available by Expression of Interest.
Occupying a blue-chip 1,305 sqm corner site, 103-105 Earl Street features a 10-year lease to United Petroleum to 2022, with further options to 2037.
It also includes an additional revenue stream from a digital signboard leased to ASX-listed media company Ooh! until 2027, with a further 10 years of options.
The property returns a net income of $188,102 per annum, with annual rent increases of 4% and 3% from United Petroleum and Ooh!, respectively.
Burgess Rawson agent Zomart He said the property also holds significant appeal as a future development site due to its General Residential zoning and location amongst some of Melbourne’s most prestigious and sought-after homes.
“It’s a property that you can buy now and enjoy very strong returns, and then take advantage of its significant upside and opportunities from a development perspective in years to come,” Mr He said.
“We expect it will sell at around the $4 million mark, which would represent an attractive yield of approximately 5%, but with the potential for significantly higher returns through development of the site in future years.”
The Expression of Interest campaign follows months of ongoing high demand for fuel and convenience retail assets.
A Shell/Coles Express service station with similar development prospects in nearby Camberwell sold at Burgess Rawson’s September auction for $6.5 million, with the yield of 2.06%, while a service station leased to 7-Eleven at Penrith sold on a sub-4% yield for $4.95 million in October.
The property will be sold via Expression of Interest, closing 4pm on 10 December 2020.