Chapel Street retail property hits market for first time in 70 years

A tightly held retail property on Melbourne’s Chapel Street is being offered for sale for the first time in 70 years, as billions of dollars in new development reshape the South Yarra shopping precinct. 

The two-level property at 553 Chapel Street comprises 200 sqm* of retail accommodation across separate ground-floor and first-floor tenancies, generating a combined net annual income of approximately $72,833* plus GST and outgoings.  

The property also benefits from rear access and secure on-site parking, and is positioned among major retailers including Country Road, MJ Bale, Kookai, SABA, Peter Alexander and Scanlan Theodore. The ground-floor tenancy is occupied by Shoes on Chapel, an established retailer that has operated on Chapel Street for 38 years.
 
For sale through Jack Cooper and Angus Parnham of Cushman & Wakefield, the listing comes amid a significant transformation of Chapel Street, with a multibillion-dollar development pipeline headlined by GURNER’s $3.75 billion redevelopment of the former Jam Factory site. Other major projects are being progressed by Vicland, the Chemist Warehouse founders and the Yale Group. 

Cushman & Wakefield’s Jack Cooper said the property's long ownership history and prominent retail position were expected to attract interest from private investors, family offices and buyers seeking a foothold in one of Melbourne’s best-known shopping strips. 
“Properties along Chapel Street with this level of ownership history rarely come to market, particularly in such an established retail position. 

“We expect interest from private investors and family offices looking for a well-located commercial asset with existing income, as well as buyers taking a longer-term view on the precinct's transformation. 

“With billions of dollars in development underway or planned, Chapel Street is entering a new phase, and buyers are increasingly recognising the opportunity to secure a position ahead of that growth” he said. 

The property is approximately 300 metres from South Yarra railway station and benefits from nearby tram connections along Chapel Street and Toorak Road. 

The surrounding precinct is supported by an affluent residential catchment, with median weekly personal income in South Yarra approximately 73.7 per cent higher than the Victorian average. 

Cushman & Wakefield’s Angus Parnham said the property's dual-level configuration, established income and central location were among its key selling points. 
“The property provides two separate tenancies across a compact freehold holding, offering investors an established income stream in one of Melbourne’s most recognised retail destinations. 

“The combination of strong surrounding retailers, excellent public transport connectivity and the scale of redevelopment taking place nearby provides a compelling long-term outlook for this section of Chapel Street. 

“Importantly, opportunities to acquire smaller freehold investments in tightly held retail strips remain attractive to private capital, particularly where there is potential to benefit from future precinct improvements.”
Cushman & Wakefield has transacted more than $80 million worth of property along Chapel Street over the past 24 months. 

The property at 553 Chapel Street, South Yarra, is being offered for sale by on-site public auction through Cushman & Wakefield.