Fortis Strengthens Victoria Development Pipeline
Sydney-based developer Fortis has bought a pair of South Melbourne sites with plans to build $112 million worth of commercial developments.
The separate sites, at 313-317 Kingsway and 34 Eastern Road, were bought for a combined $17 million.
The 330sqm Kingsway site will be developed into an 18-level office tower with 4,600sqm of net lettable area and valued at around $65 million.
Fortis paid $12 million for the Eastern Road site, which it will develop into a 3,890sqm, 7-level office building with ground floor retail and valued at $47 million.
Fortis is already developing 4 other sites in South Melbourne, including a $38 million, 9-level office building at 67-69 Palmerston Crescent, which it bought at the start of the year for $8.55 million. It is also building a 6-level office building at 18-22 Thompson Street that will have a $27.5 million end value.
In November, it bought the 1,298sqm Richmond corner site at 8 Brighton Street, on which it will build a 9-level apartment, retail and office building with an end value of $90 million
Buyer Opts for Suburban Office Investment
Vantage Property Investments has sold off a Box Hill office building for $17.15 million to a local private investor.
The buyer does not have plans for immediate development, despite the property selling with approval for a 30-level mixed-use development.
The 4-storey, 3,028 sqm building at 26-28 Prospect Street is 91%, and with an average lease term of 1.5 years.
Vantage Property Investments bought the property in 2002 for $5.9 million.
City Fringe Continues to Attract Tenants
In the office leasing market, the character and lifestyle attributes and accessibility of Melbourne’s city fringe continue to attract tenants in the shifting environment.
The Card Network has leased a 635sqm rare freestanding building on bustling Swan Street, Richmond. Fitzroys Associate Stephen Land has negotiated a 5-year deal at the 635sqm freestanding 250-254 Swan Street building at $254,000pa plus GST.
“Considering what is often referred to as a ‘challenging’ office leasing market, this office attracted a healthy stream of enquiry from a range of different office users and hybrid retail/office tenants. From the campaign’s launch in early April, terms on a Heads of Agreement were agreed in just over a month’s time,” Land said.
“The self-contained nature of the building, and its direct street exposure within the hugely popular Swan Street strip were huge drawcards, as was the rare, large outdoor terrace garden which was perhaps the factor that most tenants referred to,” Land said.
He said the character and charm of the heritage building, with its high-vaulted ceilings and exposed bluestone walls, also generated a substantial amount of enquiry.
“Lifestyle and wellness aspects of a workplace are more important and sought-after than ever, from the work space itself to the surrounds.
“Vibrant precincts are a huge attraction to businesses wanting to attract and retain top-tier talent. Home to one of Melbourne’s best hospitality offerings, Swan Street is busy at all hours with a number of quality places to get a coffee, or drinks or a meal, or to break up the day with a meeting out of the office.
Land said highly-accessible locations remain front-of-mind with flexible working arrangements in vogue.
“The reassessment of office space requirements in the COVID period will see ongoing fluid movement of tenants between the CBD, inner-city and inner suburban markets for some time,” he said.
“Groups have revised their space requirements and in the shifting environment, and we continue to see tenants looking for highly accessible locations while taking opportunities to seek out spaces they previously would not have considered.”
“Swan Street is easily accessible by car with major arterial roads nearby, as well as multiple tram routes and busy Richmond station,” he said, adding that the property’s associated on-site parking enhanced this further.
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.