Fitzroys Weekly Wrap - 2nd February 2018
Retail sale, 118, 120 & 122 Hardware Lane, Melbourne
Three properties located in the heart of Melbourne's CBD, 2 of which were leased to Hardware Society Café sold for a combined value of $4,400,000 which represented a combined yield of 4% and a record building rate of $28,500 sqm
Retail sale, 1264 & 1266 Heatherton Road, Noble Park
The highest bidder for the two shops leased to Bottlemart TSG Tobacco Station purchased the asset shortly after auction for $1.045 million. The 438sqm site has a floor area of 370sqm and returned a combined $55,222 plus GST and outgings.
Retail sale, 441 Bay Street, Brighton
A local investor purchased the Brighton Sports and Spinal Clinic at auction, securing the property for $4.023 million at a tight 3.6% net yield. Zoned Commercial 1, the 1,058sqm site sold with a new five-year and options until 2027.
Retail lease, 202 Elgin Street, Carlton
A wine retailer signed a 3+2+2 year lease for the 185sqm ground floor space, and will pay $59,500pa, at $321.64/sqm.
Industrial sale, 20 Gwynne Street, Cremorne
The latest Cremorne property to achieve a strong transaction figure is this vacant two-level freestanding office and warehouse of 286 sqm on a 245 sqm site, selling for $2.7 million at a land rate of $11,020/sqm.
Industrial sale, 2/1880 Hume Highway, Campbellfield
A local investor paid $865,000 for the 573 sqm property, reflecting a 5.25% yield on the short-term income from a lease to Half Price Insulation. The property has 88sqm of office space, 6.5m internal warehouse clearance and parking for four vehicles.
Office lease, 222 Lonsdale Street, Melbourne
RMIT University has signed a long 15-year deal over more than 10,600 sqm from Dexus within 222 Lonsdale Street in the CBD. The university will take up levels 5, 6 and 7 for office and administration purposes from March 2020 after current tenant Sensis moves out in July 2019, and Dexus will refurbish and upgrade the space.
Land/development site, 1-2 Moola Court & 4-6 Barker Street, Cheltenham
The 2,876 sqm property, backing onto the railway line near Cheltenham station, sold for $6.5 million with a scheme in place for a four-level, 49-dwelling development including 11 townhouses and 73 car spaces. Sold at a unit rate of $132,653/unit and land rate of $2,260/sqm.
Byron Street a boon for Footscray’s boom: Footscray’s hospitality and retail evolution has taken its next step, with Maribyrnong Council’s Byron Street development fully leased ahead of opening. It has brought recognisable names Huxtaburger and Japanese eatery Don Don to the western hub’s CBD, and given another chance to operators displaced by the fire that destroyed the iconic Little Saigon Market opposite late in 2016.
The 47-61 Byron Street building comprises a public square, eight ground-level retail spaces covering a combined 700 sqm – five fronting Byron Street and three fronting the new plaza – and 124 car spaces across four levels.
Fitzroys Director Rick Berry was responsible for leasing the project with colleague Terence Yeh, on behalf the Council.
“The location had its challenges, and positioning a new street frontage project into a traditional retail location can sometimes alienate local traders. But Footscray embraced the project and we have secured a range of high quality operators,” Berry said.
“The combination of a well known brand like Huxtaburger with the likes of Gong Cha, Hot Star and Don Don, as well as local operators has given the project a very strong offer.”
Tenants also include a Chinese café and a pharmacy that were displaced by the Little Saigon fire, and a hair salon. Tenancies range from 57 sqm to 170 sqm, with hospitality operators able to make use of outdoor seating areas that come with the north-facing site. Rental rates are in the range of $550 per sqm to $650 per sqm, with 4% annual increases.
Berry said the development had also played the vital role of activating more space in the Footscray CBD. New residential developments, the upgraded railway station, ongoing strength of the Victorian University campuses, and a major new A-grade office project at McNabb Avenue are bringing more people to the precinct through the day and into the night.
“There are many examples of restaurants and cafés in parkland owned by Council, and in this case the Council has addressed the need for public car parking and at the same time introduced contemporary retailing to Footscray CBD, developed an income-producing asset and also provided an activated street level retail frontage that is preferable to car parking at ground level,” Berry said.
Hot start to 2018 for Melbourne fringe land sales: Developer Growland has acquired a 26.18-hectare site in the new suburb of Fraser Rise in the Melton growth corridor, with plans for a 430-lot house and land community aimed at second or third home buyers, with an end value of $258 million.
Meanwhile, local developer Wolfdene paid around $100 million to joint venture partners Villa Worls and CVC Limited for a 200-hectare landholding at 960 Donnybrook Road, which could potentially hold 2,000 homes and have an end value of $800 million.
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.