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 Investment Type: | Retail |
 Price: | $ 7100000 |
 Net Yield: | 6.1 % |
Net Yield - including solar strategy: | 6.2 % |
 Property Market Status: | OFF Market |
24-28 Main Road Moonah is a significant dual tenanted retail site on one of Hobart's most frequented thoroughfares and incorporates dual street frontage. The Main Road is considered equivalent to Hobart’s ‘High Street’, representing the densest commercial strip in Greater Hobart. The strip has significant traffic volumes, and has just under 25 percent of all traffic lights in Southern Tasmania. The premises provides a gross lettable area of approx. 3878sqm, and comes with a healthy amount of off street parking (major strength in this area) Only 6km from the Hobart CBD, this large land holding, combined with being in a designated high growth corridor, is likely to underpin significant capital growth in the asset (even without the rent reversion and rezoning upside). The site is leased to the main anchor tenant Ashleigh Furniture (national tenant), who occupy the main road frontage. Asheligh have been on site over 15 years. The rear frontage is leased to Hunts Heating, who have operated their showroom since 2018. The combined net return is $ $442,513* - 6.05% (assumes property management of 3%), with the tenants responsible for 100% of outgoings. This asset has a serious amount of capital growth upside, due 1) recoverability of property management fees, 2) major rental upside, with the head tenants rent well below market rent, and 3) development upside, with the site recently approved for development of apartments (above commercial). 1) The lease shows that property management is recoverable from the anchor tenant, this immediate potential upside can increase the net yield to 6.23%. 2) The asset appears to be significantly under rented, versus a sample of similar retail properties in the area. This provides a huge upside opportunity at the anchor tenants market review in 6 years time. Compared to recent market review on a similar asset nearby, the asset head tenant lettable area is under rented by a whopping $200/m2 (upside of $10,800,000 based on this upside alone, in today’s dollars). See ‘Rental growth upside potential’ page for more information. Further supporting the uplift strategy, is the fact the main road strip is very tightly held, and under strong demand from both local and national retailers. This would place the purchaser in a strong position to negotiate at the anchor tenant lease review in 2030. 3) Main Road Moonah is part of a designated high growth corridor within Hobart, which provides some exciting development opportunities for this site. Excitingly, the asset has recently had a development overlay added, allowing apartments. The apartment overlay has been enacted within the planning scheme in recent weeks.
Asset Age: | |
Reason For Selling: | Divesting |
Days Property Has Been On Market: | |
Strata Titled: | No |
Last Year/Price Sold: | |
Security Provided: | Bank Guarantees |
Seller/Tenant Related Parties: | No |
Average Re-Lease Time: | |
How Long Has Current Tenant Been On Site? | Peter Shepard - over 15 years; Hunts - August 2018 |
How Long Have They Been In Business Overall? | |
Maintenance Works Required? | No |
Unapproved Structures On Site? | No |
Flood Zone: | |
Leaseback? | |
First Time Rethink Have Had This? |
Moonah, part of the city of Glenorchy has a strong, private sector economy with a mix of traditional industries, innovative high-tech enterprises and dynamic small businesses. The City is considered the industrial centre of Tasmania. Major industries such as Nyrstar, Mondelez International, Incat and Blundstone are all located in the City along with a defence and maritime industry precinct and the Tasmanian Technopark. Glenorchy’s retail precincts of Glenorchy, Moonah and Claremont are important in the Hobart metropolitan region as is the Derwent Park showroom precinct. Main Road Moonah provides a critical link between the Hobart CBD and the fast gentrifying northern suburbs of Hobart. The strip is considered a ‘high growth corridor’, with significant amounts of existing vehicle traffic, with plans for significant development and investment.
Strong Economic Fundamentals: Hobart’s economy has experienced consistent growth, driven by diverse sectors such as tourism, real estate, and education. Population Growth: The city has witnessed a steady influx of residents in recent years, contributing to a growing consumer base with increasing purchasing power. Tourist Magnet: Hobart’s appeal as a tourist destination has elevated the demand for retail spaces, especially in prime locations. Strategic Location: The property’s strategic location ensures high visibility and accessibility, essential factors for retail success.
Asheligh Furniture Hunt’s Heating
Direct to you from the world’s largest furniture manufacturer! Ashley Furniture is your trusted partner and style leader for the home. This commitment has made Ashley HomeStore the No.1 furniture retailer in the U.S. and one of the world’s best-selling furniture store brands with more than 900 locations. Additionally, Ashley Furniture provides to over 20,000 storefronts in over 123 countries. Your home is more than a house, it’s the daily moments and experiences you share that make it uniquely you. When you visit Ashley Furniture Tasmania, you'll find stylish, quality furniture at an exceptional value. Please come in, take a seat and explore Ashley Furniture Tasmania. This Ashley Furniture HomeStore website and stores are independently owned and locally operated by P. Shepherd Nominees Pty Ltd, holder of an Ashley license in Tasmania. The operator has run the business for many years, and also operating other furniture retailers
Asheligh Furniture Hunt’s Heating
Direct to you from the world’s largest furniture manufacturer! Ashley Furniture is your trusted partner and style leader for the home. This commitment has made Ashley HomeStore the No.1 furniture retailer in the U.S. and one of the world’s best-selling furniture store brands with more than 900 locations. Additionally, Ashley Furniture provides to over 20,000 storefronts in over 123 countries. Your home is more than a house, it’s the daily moments and experiences you share that make it uniquely you. When you visit Ashley Furniture Tasmania, you'll find stylish, quality furniture at an exceptional value. Please come in, take a seat and explore Ashley Furniture Tasmania. This Ashley Furniture HomeStore website and stores are independently owned and locally operated by P. Shepherd Nominees Pty Ltd, holder of an Ashley license in Tasmania. The operator has run the business for many years, and also operating other furniture retailers
Bank Guarantees
156-158 Main Road Moonah – 3,878m2 - $113/m2 Amart Furniture - 402 Brooker Highway, Derwent Park – 1000m2 - $275/m2 Tesla - 402 Brooker Highway, Derwent Park – 4030m2 - $275/m2 Early Settlers Furniture – 1605 - $224m2 Good Guys - 141 Main Road, Moonah – 1945 – 316/m2 *the most recent comp, with inferior parking Office Works – 105 to 109 Campbell Street – 2764m2 – 295/m2 Dan Murphy’s – 191 to 199 New Town Road – 1755m2 - $267/m2
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• Net return of approximately $442,513, or 6.05% net yield (3% property management) • High profile dual tenanted site on likely the densest commercial strip in Tasmania, with significant traffic volumes • Dual street frontage enables diversification via 2 tenants • Well established tenants who have been on site a number of years and operating successfully • There is strong existing demand by both local and national tenants for this prime location, which supports raising rents to market level at the market review • Excellent development potential, with the zoning supportive of a great variety of uses, further supported by being part of a major growth corridor of Hobart. The location has been recently earmarked for ‘apartment development’ • Tenant pays all outgoings. This includes recoverability of property management from the anchor tenant, representing immediate upside • Large land holding under pinning long term capital growth, only approx. 5km from the CBD • Future capital growth upside potential by adjusting rent to market (comparables suggest the asset is significantly under rented by at least 90%) • Great discount secured off market, providing an excellent return relative to an asset with such strong upside potential (6.05% is a strong yield for an asset with such upside) • Located in the capital city of Hobart, within the state of Tasmania. Tasmania has outperformed all other states consistently over a number of years