Fitzroys Weekly Wrap - 14th May 2021

Posted on 14th May 2021

438-440 Toorak Road, Toorak
An offshore investor bought the 394sqm Toorak Village building. Leased to the ANZ Bank on a 3-year term from May 2020, the 354sqm corner site has dual frontages to Toorak Road and Carters Avenue.

1 Main Street, Mornington
The vacant 569sqm former cinema building sold for $3.72 million. It is on a 506sqm site zoned Commercial 1 with an 11m frontage to Main Street.

1419 Toorak Road, Camberwell
The 350sqm Westpac bank branch building, on a 444sqm site, sold for $2.588 million to a local investor. Westpac will be vacating the Commercial 1-zoned site later in the year.

465 Riversdale Road, Hawthorn East
An investor bought the 193sqm site leased to Taco Bell for $1.075 million at a 3.98% yield. Taco Bell has been at the site for around 35 years, and has a 5-year lease to 2025 with a 5-year option returning $42,758pa net plus GST.

409 Nepean Highway, Chelsea
An investor bought the 2-level 610sqm building on a 443sqm site. Zoned Commercial 1, it is leased to Chelsea Pricecut on a 5+5-year deal on the ground floor and to the Live Life Well Yoga Studio on the 1st floor, for a combined return of $125,203pa net plus GST.

4/1A Zoe Drive, Wollert
The 111sqm Cellarbrations-tenanted shop sold for $1.088 million, at a 4.55% yield. It has a 7-year lease until 2023 plus options to 2033, returning $49,494pa net plus GST with 4% annual increases.

2/14 Matilda Avenue, Wollert
In the same retail complex, another 111sqm space leased to Blue Tongue Pizza sold for $970,000 at 5.35%. Its 7-year lease runs to 2024, with options to 2034, and returns $51,941pa net plus GST with 4% annual increases.

Shops 1 & 3, 1-3 Armstrong Street, Middle Park
Educational marketing group Candlefoc leased the 2 shops for 5+5 years at $60,000pa net.

126 Rupert Street, Collingwood
The 260sqm, 2-level converted brick office building sold vacant for $2.46 million.

838 Collins Street, Docklands
Proptech firm Re-Leased Property Software leased the 124sqm office for 2 years at $62,000pa plus GST. The adjoining suites are within the Lendlease-developed Lifestyle Working building.

2 Carmen Street, Truganina
Family-owned gluten-free baked products supplier Heaven’s Bakehouse paid $6 million for the 3,955sqm office and warehouse to use as its new production facility.

20 Clarice Road, Box Hill South
A local resident bought the vacant 1,154sqm showroom and warehouse building for $2.875 million. It is on a 1,115sqm site zoned Industrial 1.

24 Eileen Road, Clayton South
The vacant 467sqm office and warehouse sold for $955,000.

148-150 Murphy Street, Richmond
Hobart-based microbrewery Fox Friday Brewer leased the 1,350sqm showroom and warehouse for 10 years at $320,000pa net.

16-18 Hall Street, Hawthorn East
A national audio and home entertainment business leased the 837sqm office and warehouse for 5 years at $185,000pa net. The property’s new owners are currently undertaking refurbishments.

260-266 Bell Street, Heidelberg Heights
A local developer paid $3.52 million for the 1,188sqm site, which is permitted for 42 apartments.

2 Fogarty Street, Williams Landing
The 1,086sqm Explorers Early Learning childcare centre on a 2,900sqm site sold for $10.98 million at a 4.75% yield. Explorers Early Learning has a 15-year lease to 2034 with options to 2064, returning $521,683pa net, and the facility is licensed for 168 places.

40 Mainview Boulevard, Truganina
A Hong Kong-based investor paid $6 million on a 4.91% yield for the 896sqm childcare centre leased to One Early Education Group. It has a 14-year lease to 2035, with options to 2065, returning $294,775pa plus outgoings and GST net.

6 Whitehall Street, Footscray
The telecommunications tower on a 43.9sqm site, zoned Activity Centre, sold for $990,000 at a 7%. Wireless infrastructure provider Axicom Pty Ltd pays $70,917pa with 6% annual increases.

Burke Road, Camberwell to Again Take Centre Stage
Burke Road, Camberwell is again set to take centre stage in Melbourne’s retail property market, as investors continue to recognise the resilience of Melbourne’s shopping strips.

Fitzroys agents Chris James and David Bourke are marketing 634 Burke Road, which will be offered for sale by executor’s auction on Friday, 28 May at 1pm.

The dual-fronted building has active street frontages to Burke Road and Market Place and is leased to 2 longstanding tenants. High-profile national retailer Mecca Cosmetica occupies the space fronting Burke Road with Spring Massage Therapy at the rear, for a combined return of $230,809pa.

On a generous 249sqm landholding, the property is surrounded by leading retailers including Provincial Home Living, Sheridan, Telstra, Laurent, and Smiggle, among others, and its frontage to Market Place offers additional activation to the market car park and Camberwell Central, which has a Woolworths, Kmart, Officeworks, and Aldi.

The offering comes just after Fitzroys’ 2nd recent major sale in the strip - the remarkable $6.788 million auction sale of 580 Burke Road, at $1 million over the reserve and at a sharp 3.8% yield. National apparel tenant Witchery, part of Country Road Group, showed its confidence in the location with the recent extension of its long lease over the property.

A short distance away is 751-753 Burke Road, home to national retailer Mountfords Shoes on a long-term lease, which Fitzroys sold for $7.55 million at a tight 4.1% yield in the first auction of a prime Melbourne shopping strip asset in 2021.

Bourke said it is notable that both properties are leased to tenants selling items of a non- essential, discretional nature - fashion and footwear, respectively.

“The strong results are a reflection that confidence in retail property is returning to pre- COVID levels, and of the resilience of Melbourne’s shopping strips.”
Fitzroys’ Chris Kombi and Chris James sold 580 Burke Road on behalf of private owners that have held the property since 1977. The

commanding, dual-fronted 344sqm freehold is located in the heart of the famous shopping strip, on a 361sqm site zoned Commercial 1, and with 2 genuine street frontages to both Burke Road and Market Place.

Multiple bidders competed at the auction following a campaign that generated strong local and international enquiry, and a local investor emerged successful as Melbourne’s retail and commercial property market passed another test.

“The security of well-located bricks and mortar assets with quality leases has become even more highly sought-after during the COVID period, as well as in the ultra-low interest rate environment.

Growth Corridor Sites Snapped Up by Developers
Developers have been buying up major land parcels across Melbourne growth corridors, with more sites changing hands this week.

SIG Group, headed by Dahua Melbourne’s former development manager Hugh Lu, has acquired a 33.41ha site in Tarneit from the founders of Victoria’s largest Islamic school, Al-Taqwa College.

It paid $58 million for 860 Derrimut Road, of which 12ha will be retained by Al-Taqwa to develop a new campus that will complement its main campus in Truganina.

SIG Group has just acquired the 434ha Merri Park estate in the northern suburbs for around $100 million, which can support between 900 and 1,000 housing lots within a new 110ha suburb, as part of the Donnybrook-Woodstock Precinct Structure Plan, and a 199ha industrial estate within the Beveridge Intermodal Freight Terminal precinct.

In the south-east growth corridor, a group headed by former Bendigo Bank director Don Erskine has bought the 31.4ha Bonview apple orchards site at 373 and 405 Brown Road in Officer for $60 million.

The site can potentially support around 400 housing lots.

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 2021 Fitzroys.

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