LONG lease options and a large land holding have contributed towards a local investor paying top dollar for a healthy investment.

The investor snapped up the freehold on the Goodlife Health Club at 312-320 High St, Belmont for $5.322 million — a net passing yield of 7.5 per cent.

JLL, Melbourne, agent Stephen Bolton said that the strong lease and nationally recognised brand were the big drawcard for the buyer.

The site is let for $405,000 per annum, plus GST and has annual rent increases of 3 per cent.

“The purchaser was attracted to the new five- year lease and five-year option to a recognised, longstanding tenant, a passing annual income of $405,000 plus GST and annual rental increases of 3 per cent,” he said.

“Supported by a significant land holding of 4903sq m and a 75m frontage to High St, Belmont, the asset provided plenty of scope and flexibility for the long term in an area with ample amenity and projected growth.”

Goodlife Health Club, which has more than 77 locations nationally, is owned by Quadrant Private Equity, which also owns Fitness First Australia and Jetts Australia. The expressions of interest campaign generated strong inquiry from local, interstate and offshore investors.

New investment is continuing to capitalise on the strength of the Victorian economy, which is outperforming that of other states, according to Mr Bolton.

JLL, Melbourne agent, Stephen Bolton said the site could potentially be used for residential in the future.

“As the state’s second-biggest city, Geelong is well positioned to contribute to the state’s future population growth with forecast growth expected to be above the state average,” Mr Bolton said.

“The buyer, a local investor, intends to be a long-term holder, recognising the rarity of the asset within a growing location and future that the Geelong region offers.”

Mr Bolton had expected interest to come from groups with a mind to future development, given the property’s proximity to Belmont shopping, Waurn Ponds shopping centre, Deakin University and Epworth Hospital.

“It’s good to know any investment you buy is underpinned by good land, it gives you good flexibility and options,” he said. “There’s a whole raft of amenities close by that adds to the push into the future should it ever be redeveloped.

“I can see things like townhouses, maybe even an aged care facility, student accommodation — a whole raft of different uses because of what’s in the surrounding area.”