Dan Murphy’s in Cheltenham is set to test investor demand in the freestanding retail market, as the sector continues to demonstrate buoyant market conditions – with strong liquidity and pricing being witnessed in the retail-subsector.

JLL’s, Tom Noonan, Stuart Taylor, Jarrod Herscu and MingXuan Li together with Gorman Commercial’s Tom Maule and Jonathon McCormack have been appointed to run the public expression of interest campaign on behalf of a Melbourne based developer. 

Dan Murphy’s Cheltenham is located on the corner of Bay Road and Chandos Street in the affluent Bayside area of Melbourne approximately 17km south-east of the Melbourne CBD.

The property provides a strategic 3,469sqm parcel of land comprising a free-standing Dan Murphy’s tenancy and approximately 64 at-grade carparks. The asset is underpinned by a 10-year Lease to Dan Murphy’s with options to 2079 providing a current rental of approximately $666,760 p.a. + GST.

Tom Noonan, Director of Retail Investments at JLL said “We are anticipating significant interest in the asset, with Dan Murphy’s investments being one of the most sought-after retail covenants in the retail market – since 2014 there have been 10 metropolitan Dan Murphy’s transactions at an average yield of 3.89%” 

Tom Maule, Director at Gorman Commercial said “The freestanding Dan Murphy’s was built new in 2019 and forms Stage 1 of Cheltenham Quarter which has been developed by Brix Property.”

Adam Brick, Managing Director, Brix Property said “Securing Dan Murphy's as an anchor tenant was pivotal in establishing Cheltenham Quarter as a key activity hub. As we near the completion of Stage 2, we’re seeing strong market demand from businesses eager to be part of this thriving precinct." 

Cheltenham is a high growth suburb with population forecast to grow by almost 50% from 25,237 to 36,260 by 2046 Mr Maule said. 

“The property is expected to benefit from the numerous developments in the immediate area including Highett Common which is expected to deliver approximately 1,000 homes and is located only 200m from the store.” Maule Said 

"Dan Murphy’s Cheltenham is an exceptionally strong performing store, with the tenant paying percentage rent every year since opening. This growth in income will be a key driver of investor interest in the asset.’ Maule added.

“The Bayside location will be a major attraction for investors, being one of the most sought-after catchments for both residential and commercial real estate in Victoria. The depth of demand for retail investments in this area was demonstrated in our recent sale of the Porsche Centre Brighton which sold for $25.5m on a 4.8% yield, establishing a new benchmark in the sector” Mr Taylor said.

The marketing campaigns follows a string of high-profile sales in the Bayside area including Coles Hampton, Coles Bentleigh and Porsche Centre Brighton” Mr Noonan continued.

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