Burke Road, Camberwell Suited to Remarkable Results
The home of Burke Road, Camberwell’s longest-running business, menswear retailer Cavalier – which famously dressed TV star Bert Newton – has sold at an online auction in the latest remarkable retail property sale along the shopping strip this year.
Fitzroys’ David Bourke and Chris James sold 632 Burke Road for $4.39 million, at an incredibly sharp 2.6% yield, in the 1st time the property had been offered to the market since 1977.
A local investor living in Boroondara bought the asset after years of looking for a Camberwell property to invest in.
Established in 1955, Cavalier is the longest-running and most established business on the famous shopping strip. The retailer made a presence in living rooms across Australia through Bert’s outfits in the halcyon days of the silver screen, namely The Graham Kennedy Show, The Don Lane Show, New Faces and Celebrity Squares.
Cavalier isn’t going anywhere anytime soon. Burke Road, Camberwell has performed strongly throughout the challenges of COVID, according to Fitzroys’ latest Walk the Strip report, and the retailer has thrown its confidence behind the shopping strip in signing a new 5+5-year lease.
The 2-level, 234sqm building is on a 253sqm site in the absolute prime of the famous shopping strip, next door to Mecca Cosmetica and surrounded by leading retailers including Sheridan, Telstra, Decjuba, Laurent, and Smiggle.
“There is huge pent-up demand that has built over the past 18 months, due to a lack of high- quality commercial property investment opportunities coming to the market,” Bourke said.
“The large volume of capital in the market simply isn’t being deterred by COVID interruptions. We’re consistently seeing results push new benchmarks.”
Initially the property was set for an on-site auction early in the month, but this was pushed back due to Melbourne’s 6th lockdown. Among the 30 registered bidders were investors from Melbourne, interstate, Singapore and Hong Kong.
“The commercial property market has been remarkably adaptable during COVID. Technological and logistical advances mean we are able to deliver a transparent and strong result that all parties are satisfied with.”
This is the 4th prime Burke Road asset put to the market this year through Fitzroys, marking the changeover of a combined 180 years of ownership across the offerings. Fitzroys has now sold $24.73 million at an average yield of 3.8%.
“It is especially noteworthy that all of these assets have been leased to discretionary retailers, further demonstrating the premium investors place on well-located shopping strip assets with leases to quality tenants,” Bourke said.
“The results reflect the confidence in retail property and the resilience of Melbourne’s shopping strips. Well-located bricks and mortar assets with quality lease covenants offer secure income-producing investments, which have become more highly sought-after in the COVID period and ultra-low interest rate environment.” Fitzroys recently sold the 634 Burke Road building next door, home to Mecca Cosmetica, for $6 million at another virtual auction, fetching $1.4 million above the reserve. That followed Fitzroys’ $6.788 million auction sale of the Witchery store at 580 Burke Road, at $1 million above the reserve, and of 751-753 Burke Road, home to national retailer Mountfords Shoes on a long-term lease, for $7.55 million.
Jam Factory Redevelopment Plans Revised
Newmark Capital, developer Gurner and fund manager Qualitas are submitting revised plans for the $1.5 billion redevelopment of the 1.8ha Jam Factory precinct.
The new plans comprise 4 high-end apartment towers, with the highest rising 25 levels, and 3 levels of retail and entertainment totalling 21,000sqm that will include a redevelopment of the existing cinemas.
There will also be 1,700sqm of new public space across a dual-level plaza and amphitheatre with an open staircase for events, and integrated laneways based on the area’s original 1864 master plans for the precinct – when the red-brick building was constructed as home of the Red Cross Preserving Company.
Newmark Capital bought the site 6 years ago for $165 million. Gurner and investment partner Qualitas bought into the project earlier this year.
From Bayview Hotel to Build-to-Rent
Aware Super and fund manager Altis Property Partners have purchased the Bayview Hotel site on Queens Road for $70 million-plus, with plans to create more than 300 build-to-rent apartments.
Aware Super manages $140 billion on behalf of more than 1 million members, and now has a build-to-rent pipeline of almost 1,400 units.
The Bayview Hotel has remained closed since the 1st pandemic lockdown early last year. Bayview International Hotels & Resorts, a subsidiary of Malaysian company Oriental Holdings, was the vendor of the nearly-7,000 sqm site at 50-52 Queens Road.
Earlier this month, US-based Greystar received approval for a $500 million build-to-rent facility in South Yarra’s Forest Hill precinct, which will have 625 apartments across 2 towers and be Australia’s largest build-to-rent project to date.
Among Melbourne’s major build-to-rent projects are Mirvac developments next to the Queen Victoria Market, on the former Melbourne Convention Centre site at 7 Spencer Street, and a in Brunswick, while Oxford Properties is planning a $450 million project in Footscray, and investment manager Hines has just bought a 4,247sqm site also in Brunswick for a $250 million building.
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.