Geelong retail investment properties are “flavor of the month“ for major commercial property investors, according to a leading agency.
The interest was riding on “massive” population growth and its consequent increase in demand for retail goods and services”, CBRE said.
The company’s observation contrasted recent concerns about shopfront vacancies, especially in central Geelong.
CBRE retail directors Mark Wizel and Justin Dowers said Geelong’s retail properties offered growth levels consistent with Melbourne but without the level of competition in Melbourne’s outer suburbs.
“We’re seeing shopping centre investments within Geelong and the Bellarine Peninsula trade at similar returns and pricing levels to metropolitan Melbourne and that’s very attractive to investors in an increasingly tight Melbourne market,” they said.
“Forecasts of continued population growth also provide investors with a high level of confidence in local market fundamentals underpinning the potential for attractive capital growth.”
“Massive” population growth projections
CBRE noted projections of Geelong’s populations growing 32 per cent to 325,779 by 2036 and the peninsula’s rising 63 per cent over the same time.
Geelong’s recovery from decline in the manufacturing sector provided the city with “an even greater claim to its ability to provide a sound economic base for its residents”, Mr Dowers said.
“Geelong’s ability to attract new employment industries, including the likes of the NDIA, Worksafe and Workcover, has given investors a lot of confidence in the resilience of the local economy and its ability to stand on its own two feet. We’re now seeing that in the growing demand for commercial property assets.
“The growth in population is understandable. People are moving to Geelong because it’s a valid economic proposition.
“House prices are affordable, there’s enough employment and you have access to some of the best beaches in Victoria.”
Mr Dowers said recent examples of investor’s interest in the region included Centuria Property Group’s acquisition of TAC’s waterfront headquarters for $115.25 million and Toorak investor David Feldman’s $35 million purchase of Torquay Village.
