902-904 Nepean Highway, Hampton East
The 401sqm freehold occupied by an ANZ bank branch sold for $3.251 million, on a 5.12% yield. It has an 11m frontage to Nepean Highway and the major lender recently undertook a $1.2 million fit-out, and has a new 4.5-year lease with options to 2033, returning $166,400pa.
23-27 Church Street, Brighton
The owners of Chemist Warehouse bought the Waterfront restaurant and retail freehold for $9.95 million. Tenants in the 400sqm building, including Eco D, pay $357,600pa in rent. It is on a 552sqm site.
188-200 Gertrude Street, Fitzroy
Boutique baby goods business The Memo signed a 5-year lease within the 2-level heritage-listed building, at $160,000pa net plus GST.
55 Exhibition Street, Melbourne
The Commonwealth Superannuation Corporation (CSC) spent $7 million buying floors 4 and 5 of the building. The CSC had bought level 7 for $4.75 million in 2021. It owns the neighbouring 57-storey 101 Collins Street office building.
105 Elizabeth Street, Melbourne
An offshore investor based in China bought the 5-level CBD office and shop building on a 246sqm site for $7.55 million.
260-280 Governor Road, Braeside
The Found joint venture between Spectre Property and Hexa Group bought the 29,370sqm parcel of land for more than $23 million.
2/1090-1124 Centre Road, Oakleigh South
The 8,333sqm warehouse was leased at around $150/sqm. It was built by Texco Construction in 2017 and sublet by Stockland to World Wire Cables.
26A & 26B Dickens Street, Elwood
The 822sqm corner site home to St Kilda Day Hospital and general practice St Kilda South Medical Centre sold for $5.701 million, on a 7.74% yield. Not-for-profit MSI occupies St Kilda Day Hospital, while the Medical Centre has subleases to Sonic Health and Healius Pathology. Total building area is 418sqm, plus basement parking for 7 cars.
Melbourne’s Prime Shopping Strip Market Set for First Auction Tests in 2024
Melbourne’s prime shopping strip market is set for its first auction tests in 2024, with assets in the absolute prime of Lygon Street, Carlton and Brunswick Street, Fitzroy going under the hammer at respective on-site auctions on Thursday, March 14th.
325 Lygon Street, Carlton will go to auction at 12pm on the day, with expectations of $1.7 million-plus. It is the long-term home of Carlton Newsagency and directly opposite Lygon Court, home to Cinema Nova and Brunetti.
Fitzroys’ Mark Talbot and Shane Mills are marketing the property on behalf of the Saffar and Durlacher families.
Carlton Newsagency has been at the property for around 20 years. Rental return is $77,712pa plus outgoings and GST, with the current 7-year lease ending 31 January 2025 with 2 further terms of 5 years each.
“There’s potential for significant rental growth from January,” Talbot said.
“This property will suit investors looking for significant rental growth, or a long-play buyer looking for an asset that will deliver a solid ongoing income stream.”
Talbot said the property is in the absolute prime of Lygon Street, between Faraday and Elgin Streets, opposite Lygon Court - home to Cinema Nova, Brunetti Classico and Woolworths - and amongst the strip’s famous cafés, restaurants, bars, retailers and entertainment venues including Tiamo, Heartattack and Vine, Milk the Cow, Grill’d, DOC Pizzeria, Crinitti, King and Godfrey, Seed, Mecca, Sportsgirl, Country Road, Readings, to name a few.
“This is an incredibly tightly held part of Melbourne. Lygon Street is arguably Australia’s most famous dining strip and has come back from COVID in a big way, bringing huge confidence to owners and the market about the investment credentials and trade prospects of the strip,” Talbot said.
According to Fitzroys’ most recent Walk the Strip report, vacancies on Lygon Street have come down from 20.0% in the depths of COVID to now sit at just 6.0%.
Talbot said the return of local and international students to Melbourne’s education precinct close by has also underpinned the return of trade along Lygon Street, and the rapid transformation of Carlton to accommodate and encourage student and residential apartment developments will further enhance its viability, as will the incoming Parkville Station, part of the Melbourne Metro Tunnel project, which is set to open in 2025.
320-324 Brunswick Street, Fitzroy goes to auction on the 14th March at 2pm. The dominant triple-storey freehold, known as the Shawcross Building, is on the corner of Argyle Street and is fully leased to Shawcross Pizza, Lost Boys Bar and Brunswick Street Gallery, returning $227,688pa plus outgoings and GST.
The 580sqm building features a towering brick façade in the American Romanesque style and comprises 2 ground-floor shops and 2 light-filled upper levels, on a valuable corner landholding of 314sqm with on-site car parking. It has an expansive frontage of 15.24m to Brunswick Street, 20.22m to Argyle Street, plus laneway frontage.
“This is a generational opportunity to acquire one of Brunswick Street's most iconic and high-profile buildings, located in the absolute heart of one of Melbourne's most vibrant hospitality and lifestyle strips,” Kombi said.
“Investors can acquire one of the most dominant properties in Brunswick Street, Fitzroy, and secure a strong cashflow from quality tenants, with great rental uplift and value-add prospects in the coming years.”
Vacancies on Melbourne’s archetypal inner north hospitality and lifestyle strip are at their lowest in years as Melburnians again embraced shopping, dining and eating out. According to Walk the Strip, vacancies on Brunswick Street, Fitzroy now sit at just 4.6%.
“Prime assets in Melbourne’s iconic shopping strips are offering excellent investment credentials,” Kombi said.
“The strips are currently experiencing a real period of renewal.”
He said Yarra Council has promoted significant development throughout Fitzroy and Collingwood in recent years, demonstrated by the number of major projects in different stages of planning, construction and completion.
“More people want to live, work and play in highly accessible areas with quality lifestyle attributes, and the major influx of residential and commercial development throughout the area has resulted in a huge population boom that’s further underpinned the viability of Brunswick Street.”
Special Interest Buyer Wins Out From Developers to Secure Prized St Kilda Road Site
A special interest buyer has won out from developers to secure a prized 1,300sqm St Kilda Road site in an off-market transaction negotiated by Fitzroys.
Mark Talbot and Tom Fisher of Fitzroys acted on behalf of a Melbourne-based family. Public records show the site transacted for a large sum of $7,150,000.
The site was previously occupied by Tradelink Plumbing Supplies, and is expected to make way for a new flagship showroom and offices, Talbot said.
The occupier will imminently make a planning application to Port Phillip Council for the site.
Talbot said the purchaser came in over the top of a number of developers in the off-market process. The site has previously had a permit for a premium 6-storey mixed-use development with 44 apartments. “This was a strategic off-market process in which we canvassed developers as well as special interest buyers, creating a very competitive campaign that ended with a strong result for the vendor in what has been an otherwise relatively subdued market over the past 18 months.”
The sale price reflected a strong land rate of $5,218 per sqm for the Commercial-zoned land.
“Rising construction costs and increasing holding costs such as financing and land tax were making conditions increasingly challenging for developers and our off-market targeting needed to reflect this,” Talbot said.
“The purchaser’s new offices will have excellent exposure to a large number of people every day, and will offer an easily accessible and prominent flagship store location.”
Wyndham City Council Acquires Slice of Werribee History
Wyndham City Council is the new owner of Werribee’s landmark Picture Palais building.
Fitzroys’ Chris Kombi and Ervin Niyaz sold 15-19 Station Place for $4.4 million through an Expressions of Interest campaign, with the sale price reflecting a tight 4% yield.
“This was an incredibly rare chance to own a piece of Werribee’s history. We received multiple offers during the successful Expressions of Interest campaign, with interest coming from a range of investors” Kombi said.
“Wyndham City ultimately thought it would be fantastic for the area and the community to have this slice of local history in Council’s hands. This will ensure the legacy of a Werribee landmark will be preserved for the long-term.
“The Picture Palais played a huge role in the cultural life of Werribee as it transformed from a rural township into a major suburb and commercial centre of Melbourne’s south west.”
Wyndham City has invested heavily in the Werribee City Centre, including a $13 million redevelopment of Wyndham Park, reactivation of the Bridge Hotel and the Hunter Werribee building with Holiday Inn, offices, shops and public parking
“Currently occupied by ASX-listed Cash Converters, the asset also gives the Council a secure income stream from a high-quality tenant,” Kombi said.
The circa-1928 2-level 1,000sqm Picture Palais building is on a generously proportioned 813sqm site with a commanding 21.34m frontage and Activity Centre zoning, located in the heart of the Werribee commercial centre. It’s also immediately adjacent to the Werribee train station entrance and with a large Council car park at the rear.
Fitzroys acted on behalf of the Carter family, historically successful poultry farmers with a long and storied history in Werribee dating back to 1879. Several notable buildings have been constructed by and for the family in the area, including Villa Franca and Roland Carter House.
“The interest in campaign clearly reflected that Werribee is now the commercial and cultural centre of Wyndham, having developed a retail, office and lifestyle offering that draws and services residents, workers and students locally and from the surrounding suburbs,” Kombi said.
“Werribee is currently undergoing a period of revitalisation and development as both it and Wyndham experience unprecedented population growth.”
Mitchell House and Milledge House Sell for $56m
Adjoining Art Deco Melbourne CBD buildings Mitchell House and Mitchell House have changed hands for the first time in more than 5 decades, selling to a Chinese syndicate partnered with a local investor for $56 million.
The 358 Lonsdale Street property, on the corner of Elizabeth Street, sold on a 4.17% yield. Both buildings are fully leased with retail tenants including Aussie Disposals, KT Mart and China Bar. They sit on a combine land parcel of more than 1,800sqm with 85m of retail frontage.
The vendors were the long-term owners the Krongold family, with their ownership originating in 1970 with a $1.5 million purchase.
“Prime assets in Melbourne’s iconic shopping strips are offering excellent investment credentials,” Kombi said.
“The strips are currently experiencing a real period of renewal.”
“More people want to live, work and play in highly accessible areas with quality lifestyle attributes, and the major influx of residential and commercial development throughout the area has resulted in a huge population boom that’s further underpinned the viability of Brunswick Street.”
Pakington Strand Sells on Sub-5.5% Yield
Woolworths-anchored Pakington Strand in Geelong West has sold to a high-net-worth investor on a sub-5.5% yield.
The 5,317 sqm neighbourhood shopping centre was returning a fully-leased net income of around $1.7 million at the time of the sale.
Vendor APH Holding had acquired the centre in 2016 for $32 million.
Woolworths pays a percentage rent and is accompanied in the centre by 13 tenants including Subway and Brumby’s, and has a weighted average lease expiry (WALE) of 12.4 years by area.
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 2023 Fitzroys.