Mildura retail property dives as home values go up

COMMERCIAL retail property values are crashing by up to 20 per cent in Mildura CBD as lockdowns and the rising popularity of online shopping take their toll on the sector, real estate agents say.

As the residential property market booms, with growth of about 15 per cent over the past year across north-west Victoria, it’s a much bleaker picture for retail property owners.

Collie & Tierney First National director Ben Ridley said that while industrial-purpose property values were “going gangbusters”, the retail market was “hurting”.

“It’s not as bad if you have a secure, long-term tenant, but if you don’t, the value of these buildings have seen quite a decline (in values),” he said.

“It’d probably be in the order of 15-20 per cent, particularly in Langtree Mall. All you have to do is walk down the mall to see how many retail shops have closed.”

Professionals Mildura director Tony Roccisano agreed that the retail sector of the commercial property market was “doing it tough”.

“Most commercial is doing extremely well and has increased (in value),” Mr Roccisano said.

“Buildings with things like medical centres, chemists and accountants – they are all very strong and good investments.

“But retail is contracting for a number of reasons. One is COVID, but two is because many younger people are buying online.

“The decline in the retail market is not just happening in Mildura. You’ve only got to go to Chapel and Swanston streets in Melbourne to see the empty shops.”

The latest local retail property estimates come as Collie & Tierney First National prepares to list the former Commonwealth Bank branch in Langtree Mall for sale on June 23.

It’s been a year since the branch was permanently closed, when CommBank relocated to Lime Avenue.

Mr Ridley said the price guide for the 900sq m site would be between $1.5 million and $1.8 million.

However, he doesn’t expect an employer the size of CommBank to snap it up.

“The chances of that happening are next to nothing,” Mr Ridley said.

“So if there’s not a like-for-like buyer, there are other possibilities of what that upstairs-downstairs space could be turned into.

“We had Chinese people look at it a couple of months ago with the view to turning it into student accommodation.

“It could also be turned into luxury apartments – or even a little central business hub.

“There is certainly a future for this site, but it’s probably going to take some left-of-centre thinking people to reimagine it.”