Paris End Retail Investment Sells for $57,000/sqm
The renowned Paris end of Melbourne’s CBD continues to draw investors from Australia and offshore, with the premises of a popular café selling under the hammer at a remarkable building rate of $57,000 per sqm.
Fitzroys agents Terence Yeh and Alex Shum sold Shop 3, 188 Little Collins Street in Melbourne’s CBD on behalf of a private vendor based in Malaysia.
Multiple bidders competed for the asset at the lunchtime auction, following a campaign that generated more than 95 enquiries from local interests and abroad.
A local investor put forward the winning bid of $2.164 million, reflecting a tight 4.2% yield.
The 38sqm property has high ceilings and a character shopfront is leased to highly regarded café Little Temperance on a secure 5+5-year lease. It is located at the base of Shocko House, a character-rich, four-storey building that was converted in 1998 to include three ground-floor retail shops with 16 residential apartments.
“Melbourne’s world-renowned cosmopolitan personality is made up of more than 200 laneways with an eclectic offering of cafés, food and beverage operators and boutique retailers,” Yeh said.
“Local and offshore investors displayed keen interest in big numbers to what represents an iconic Melbourne CBD retail investment.”
Yeh said hospitality operators often commit to longer lease terms, looking to establish a customer base and make the most of capital put towards fit-outs and operations.
“These elements can be a point of difference among Melbourne retail investments, particularly those securely leased to highly-regarded operators.”
Shum said investors recognised the rare opportunity to purchase a retail asset in a highly sought-after CBD location with an enormous catchment area of office workers, shoppers, tourists and residents.
“Melbourne’s Paris end consistently attracts quality tenants, and is known for its roll call of high-end exclusive boutiques and international luxury retailers, which is beginning to spill over to the surrounding areas.
“Vacancies consistently remain close to 0%, and huge numbers of retailers pursue space in the prized precinct, accompanied by quality hospitality, restaurant and food and beverage operators.”
Mirvac Plans Build-to-Rent for Brunswick
Mirvac has reportedly bought a 1ha site in Brunswick that it will use for its 2nd build-to-rent project in Melbourne.
The developer has paid between $35 million and $40 million for the 395-403 Albert Street site, according to the Financial Review, which is surrounded by sports ovals and Gilpin Park. It could support a project with more than 400 dwellings and an end value of $200 million-plus.
The site is comprised of a 7,018sqm industrial property at 397 Albert Street, bought from a company owned by Singaporean investors; a 2,291sqm L-shaped site at 395 Albert Street, which was acquired last year by local developer Milieu Property who will partner with Mirvac on the proposed project; and a house at 403 Albert Street on 467sqm.
Moreland City Council recently rezoned the property to Mixed Use, and it has a discretionary height limit of 8 levels and potential for retail, childcare and co-working office space.
In the middle of this year, Mirvac struck a $333.5 million deal with PDG Corporation for the Munro site opposite the Queen Victoria Market. PDG is currently building hotel and apartment towers of 38 storeys and 10 storeys and, under the agreement, Mirvac would take ownership of and lease out 490 built-to-rent units within the development.
Woolworths and Oliver Hume Buy Up Caltex Sites
Caltex Australia has sold its first tranche of 25 fuel stations across the country for a combined $136 million, with Woolworths and Oliver Hume buying up the bulk for retail and residential developments.
Woolworths bought 10 of the sites, and Oliver Hume 12 on behalf of an Asia-based investor. Three separate developers purchased the three remaining sites.
Eight of the sites are in Victoria, while 15 are in New South Wales, and there is 1 in each of Queensland and Western Australia. The Victorian properties are in Box Hill, Brunswick East, Carnegie, Clayton, Forest Hill, Frankston, Mont Albert and Pascoe Vale.
Caltex plans to sell 50 sites in total, which it has deemed to hold better value as development sites, and is also planning to spin off a portfolio of 250 freehold properties into a service station REIT in the new year
Disclosure: The weekly Fitzroys Property Wrap is for information only on transactions in the Melbourne property market. Fitzroys provides this information as a public service. We are not purporting that all sales and leases within this report were transacted by Fitzroys. Terms/Privacy © Copyright 2019 Fitzroys.