The commercial sector achieved a strong first quarter with investors, developers and owner-occupiers active in the marketplace.

While market activity has settled somewhat and plateaued in recent weeks, Barry Plant Commercial director Benjamin Klein was confident the market would see another rise in a matter of months.

“The heat was prevalent in the commercial market from January and at the back end of COVID lockdowns across Melbourne, and we noticed a significant increase in demand,” he said.

“And while we have seen a slight dip due to confidence, once concern over interest rates subsides and the election is over, the general feeling is things will begin to return to normal and pick up.”

Office and retail spaces with strong leases in place have been more favourable over the past six months, with main strips performing well.

A recent auction at 298 Blackburn Rd, Doncaster East attracted a strong 80-enquiry campaign and four bidders on the day.

The multi-storey and multi-tenanted investment achieved $2.45 million and a 4 per cent yield.

“The property had a lot of interest because of the long-standing leases with great tenants, and it sold to an investor,” Mr Klein said.

“The likes of Church Street, Brighton, Carlisle Street, Balaclava and Swan Street in Richmond continue to overperform, attracting great interest.”

Another property which has so far received strong interest from developers was a double-storey shop and two-bedroom dwelling at 1523 High Street, Glen Iris, currently listed for private sale.

“While this property targets investors, owner-occupiers and developers, this could be prime real estate for a builder looking to add value, by extending the land or knocking down and rebuilding,” Mr Klein said.

Interestingly, the industrial sector was performing “the other way around” with vacant properties getting more interest.

“Warehouses and factories with no leases and tenancies in place are currently more favourable in the market and selling better in comparison to tenanted properties,” Mr Klein said.

Big retailers such as Bunnings Warehouse and supermarkets are in really strong demand, and while yields are low, they are achieving big results, according to Mr Klein.

Another property at 69 Southern Road, Mentone, was one to watch, according to Mr Klein. The standalone office or warehouse was being offered for the first time in 37 years and will head to auction on June 9.