A wave of strip retail properties have changed hands in recent weeks, as investors pivot from residential real estate to commercial opportunities amidst a challenging legislative environment.  

Jones Real Estate Director, Paul Jones, has attributed this trend to ever-increasing land tax bills and the 7.5 per cent short stay accommodation levy which will take effect on January 1, 2025. 

“The Labor Government in Victoria is making residential property investment completely oppressive. It’s forcing investors to seek alternative avenues for their capital. 

“Strip retail properties, particularly those in premium locations, are proving an appealing alternative as they offer an entry level price point for commercial investors,” said Jones.

The Jones Real Estate team has transacted a total of seven strip retail investments in recent weeks. 

Most notably, Hawthorn House – 150 Burwood Road, Hawthorn sold for $2,050,000 to a private investor who will create a medical centre within the building. 

Down the road, 242 Bridge Road, Richmond transacted for $3,150,000 via auction, with four underbidders now primed and seeking similar assets. 

In Docklands, five properties in the Village Docklands Arcade were sold in one line for $1,000,000, to a third private investor who was attracted to the properties’ proximity to the CBD and Crown Casino. 

Jones Senior Executive, Luke Peric handled these transactions and notes this surge in demand reflects a broader market shift. "These are new commercial investors, leaving the residential market in droves. 

“They’re attracted to the resilience and growth potential of strip retail properties, particularly as population and consumer spending patterns evolve," Peric concluded.