Bay Street, Brighton Portfolio Sells for $6.83m
A portfolio of Bay Street retail properties in Melbourne’s blue-chip suburb of Brighton has sold for $6.83 million.

Fitzroys’ Mark Talbot and Chris James sold 311 Bay Street, while Talbot and Fitzroys’ Tom Fisher sold 407 Bay Street and 409 Bay Street.

All 3 properties were owned by an Estate associated with the late Tom Chapman, a prominent real estate agent who previously owned Hodges Real Estate for 3 decades from the time he bought the business in 1956.

Chapman was a highly successful auctioneer, as well as an innovator; he installed 2-way radios in his agent’s cars and was among the first to introduce display advertising in the industry to better promote sales.

More than 200 local and national buyers made enquiries across the three campaigns.

“Brighton real estate is amongst the most tightly-held and prestigious in Melbourne. The huge market response and strong results clearly reflected the perennial demand for opportunities in the suburb,” Talbot said.

311 Bay Street – previously occupied by Hodges, and now the long-term home of Brighton Carpets Carpet Court – was purchased by an investor on an ultra-sharp 1.9% yield. Six bidders competed for the 408sqm corner site and pushed the price $460,000 beyond the reserve, to $3.81 million.

“Corner sites in the heart of Brighton retail strips are ultra-rare. Investors also recognised the property’s excellent rental growth prospects, while land bankers and value-add players were attracted to the highly flexible Commercial 1 zoning and Design and Development Overlay, which promoted a three-level building height at a time in which the suburb is seeing a plethora of medium-density residential developments.

“The buyer now has a substantial prime corner site in a blue-chip Melbourne suburb to call their own.”

Two strong bidders competed for 407 Bay Street, which took the price $300,000 over the reserve to $1.84 million, and resulted in another sharp yield of 2.9%. The 2-level property has a secure 5+5-year lease from February 2020 and offered investors and landbankers the chance to secure a 247sqm site directly opposite the Coles supermarket-anchored mixed-use development.

“The market has continually shown faith in Melbourne’s shopping strips over the past 2 years, with investors opting for income-producing, well-located bricks and mortar assets with long-term leases,” Talbot said.

Next door, the versatile 409 Bay Street property sold with vacant possession for $1.18 million. Talbot said the buyer is an owner-occupier who outbid several investors to purchase the property. The high-exposure location of the property and its value-add potential were major drawcards for the purchaser.

“Bay Street, Brighton serves one of Melbourne’s most prized catchments, which has maintained a strong demographic with high disposable income and a consistently high median house price, supporting strong retail trade.”

Reflecting its even tenancy mix and affluent catchment, Bay Street, Brighton recorded among the most stable performances of any of Melbourne’s shopping strips throughout the COVID period, according to Fitzroys’ Walk the Strip report.

Fitzroys has now sold over $30 million worth of commercial property in the blue-chip suburb over the past 12 months, at an average yield of just 2.77%. Most recently, Fitzroys sold the heritage-style 990sqm dominant corner building at 71-73 Church Street & 36 Carpenter Street, home to Nike, Ecco and Laurent, for $16.2 million at a 3.8% yield. The agency also sold the Church Street home of international retailer Oroton Group for $6.07 million at an incredibly tight 2.5% yield.

Campbellfield Industrial Sells For $41m
Nick Andrianakos, founder of the Milemaker Petroleum service station chain and Nikos Property Group, has sold a 9.3ha Campbellfield industrial site for $41 million to US private equity firm Cabot Properties.

The Boston-based logistics developer create a logistics estate on the site with an on-completion value of $130 million. It will comprise 55,000sqm of lettable area across 3 buildings, with tenancies ranging from 4,000sqm to 45,000sqm.

This will be its 5th project in Melbourne, following 2 in Truganina and 2 in the south-east.

Another Industrial Property Value Surge
Also in the northern suburbs, a Mill Park industrial property has sold for $20 million to a Melbourne-based investor, after selling for $12.75 million 3 years ago.

Sydney-based investors Amal and Karim Obiadi bought the 2.4ha property at 20-30 Heaths Court in 2019 on a 6.2% yield, after the previous vendor, Cadence Property Group, secured a long-term leased with ASX-listed fruit juice maker The Food Revolution Group.

It has now sold on a 4.2% yield, with 10 years remaining on the lease. The Food Revolution Group, whose brands include Original Juice Company and The Juice Lab, uses the property for logistics, manufacturing and as a head office.

Cadence’s sale of the property in 2019 reflected a 54% capital gain on the property during just 1 year of ownership, having bought it for $7.14 million and spending $1.75 million on improvements.

Grollos Sell Dandenong Office Building for $165m
An 8-level office building in Dandenong has been sold by the Grollo family to ASX-listed Growthpoint Properties Australia for $165 million.

Constructed in 2011 and known as the Government Service Office, the Thomas Street building is almost fully leased to the Victorian Government and sold on a 5.3% initial yield.

Last year, the Grollos also sold another a suburban office building mostly occupied by the Victorian Government – the fully-leased 14-level 1 McNab Avenue building in Footscray – to another ASX-listed company, Centuria Capital Group, for $224 million. That building has an 11.8-year WALE and traded on a market capitalisation rate of 4.7%.

Mercedes-Benz Toorak Site Set for Redevelopment
Developer Orchard Piper has bought the Mercedes-Benz dealership site in Toorak for $67 million, with plans to deliver a $400 million precinct with high-end residential, retail space and commercial suites.

The 3,600sqm site at 17-19 Carters Avenue, just off Toorak Village, was bought from the Hagen family and the late John Worrell, whose father Ted established a car dealership on the site in the early 1930s. John Worrell joined in 1943 and Karl Hagen became a business partner 20 years later, and the dealership was run as the Worrells Mercedes-Benz dealership until 2004.

Orchard Piper last year acquired the 1,000sqm Toorak Village corner site at 424-426 Toorak Road and 109 Mathoura Road for $20 million for another mixed-use project, and has since expanded the site to 1,400sqm by acquiring 2 adjoining blocks.

Also in Toorak Village, Bill McNee’s Vicland is developing a $600 million office and retail development at 489-505 Toorak Road.