Shop with Dwelling

[JulieW]

Can any of the commercial IP experts help with a few questions.

Shop with Dwelling:

What are the CG prospects for this type of investment for the long term do you think?
Is distance to Melbourne GPO a big influence, as it is with residential?
How do outgoings compare with residential IPs?
What are the pitfalls (besides reliable tenants!)

Give equal dollar investment, what would you do, residential or commercial strip shop with dwelling?

 

[ChristianB]

Can any of the commercial IP experts help with a few questions.

Shop with Dwelling:

What are the CG prospects for this type of investment for the long term do you think?
Is distance to Melbourne GPO a big influence, as it is with residential?
How do outgoings compare with residential IPs?
What are the pitfalls (besides reliable tenants!)

Give equal dollar investment, what would you do, residential or commercial strip shop with dwelling?

There are some really interesting possibilities with this sort of investment, especially as a develop/invest model. The town planning is generally a lot simpler for residential above (or otherwise combined with) commercial premises. So, a dwelling (or several) above a shop can provide a much more impressive yield from the land. I am, for example, working on a project at the moment whereby the existing shop and an old tailor's room above will make way for 8 apartments above and behind the existing shop. That sort of thing just can't be done in a predominantly residential area. I look above the strip shops when I'm driving and I'm starting to see it as land! If the shops are located close to PT and other amenities there are many within our changing demographics that find this sort of accomodation appealing.

 

[Player]

This will become more and more common. As Christian mentions, increases/optimises yield and gives opportunity for a hybrid mixed use application.......not only commercial; not only resi, however mabye even home office type applicability.

Along retail strips adjacent to trai and preferably Zone 1 (for Vic) would be a nice recipe for success.

 

[mortgageman]

Hi Julie,

Proximity to the Melbourne CBD is useful, but with shops the values are much more localised to the specific shopping strips. Also make sure that the zoning is conducive to residential use as this will help the value over time and also allow residential financing against the dwelling. I hope that helps.

Regards,

Cameron Perry
Perry Financial Strategies

 

[JulieW]

Thank everyone. Perfect.

 

[ChristianB]

As a footnote, it's also worth mentioning that many councils - at the behest of the states - are looking at strip shops as an ideal place to boost density and encourage residential and commercial hybrids. There are often useful public transport links and other infrastructure that the council doesn't have to reinvent in order to house more residents. With this in mind they often seem more willing to (indeed encourage) consider higher densities.