Weekly Wrap

Fitzroys Weekly Wrap - 1st October 2021

Posted on 01st October 2021

73 Maroondah Highway, Lilydale
An investor bought the 2,039sqm fuel station corner site for $4.75 million, on a 4.6% yield. United Petroleum has a brand-new 12-year lease plus options to 2063, currently returning $218,650pa with 2.5% annual increases.

1025 Frankston-Flinders Road, Somerville
Another United Petroleum service station site with a new 12-year lease plus options sold for $3.625 million at a 4.76% yield. The 2,068sqm corner site returns $172,375pa net, also with 2.5% annual increases.

1/12 Fitzroy Street, St Kilda
The 96sqm shop leased to Domino’s Pizza sold for $1.435 million at a 3.92% yield. ASX-listed Domino’s has a lease until December that brings $56,227pa plus GST net, with 3% annual increases.

10/6-8 Eastern Beach Road, Geelong
An investor paid $690,000 for the 78sqm ground-level space home to new French restaurant La Cachette. It has a 2-year lease plus options to 2029 currently returning $29,990 net plus GST, with 3% annual increases.

17 Baltrum Drive, Wollert
An investor paid $1.075 million for the 156sqm shop, leased to an Indian grocer on a 10-year term until 2031 plus options, currently bringing $53,040pa net plus GST.

5/1A Zoe Drive, Wollert
The 110sqm space leased to an Indian restaurant sold for $906,000, with a lease to September 2024 plus options to 2029. It currently returns $57,907pa plus GST net with 4% fixed annual increases.

Shops 2 & 3, 953-967 High Street, Armadale
Ned’s Bake signed a 10-year lease at $136,000pa, within the retail component of the mixed-use Alara development.

620 Church Street, Richmond
Bang & Olufsen leased the 381sqm showroom for 5 years at $500/sqm.

399 Riversdale Road, Hawthorn East
Zoned Commercial 1, the 538sqm corner site with a vacant 336sqm office and medical building sold for $3.315 million. It has 10 on-site parking spaces.

Suite 2.02, 202 Jells Road, Wheelers Hill
The 47sqm office suite was leased for 3 years at $425/sqm.

85 Queen Street, Melbourne
Private investment company Jaszac signed a 3-year lease for the 158sqm part-level 7 space at $450/sqm.

1 Wurundjeri Drive, Epping
The 1,603sqm facility on a 5,008sqm site, home to Tailored Beverage Company, sold for $6.3 million at a 5.16% yield. The packaged liquor manufacturer has a 5-year lease with options to 2036 that currently returns $324,944pa plus GST net, with 2.5% increases. There is 1,000sqm of potential expansion land on title.

383 Boundary Road, Truganina
Beverage manufacturer Nu-Pure pre-leased the purpose-built 9,010sqm distribution facility, on a 16,017sqm site, for 10 years at $88/sqm.

4-10 Hillwin Street, Reservoir
Electric power company Mersen signed a 10-year lease at $65-$70/sqm over the 5,493sqm office and warehouse, on a 2.16ha site.

13 King Street, Nunawading
A climate control insulation company leased the 652sqm standalone office and warehouse building for 5 years at $90,000pa plus outgoings and GST.

447 & 449 Main Street, Mordialloc
Zoned General Residential 2, the 1,407sqm site comprising 2 houses sold to an interstate developer for $3 million with a permit for 10 townhouses.

151-153 Furlong Road, St Albans
The 1,062sqm site home to Capital Radiology sold for $6 million with a new 5-year lease with no further options. Capital Radiology, a subsidiary of ASX-listed Capitol Health, pays $252,344pa plus GST net in rent with 4% annual increases. The site is opposite Sunshine hospital and has development potential for up to 4 levels.

305 Warrigal Road, Cheltenham
The 1,259sqm corner site sold for $3.83 million with a new 10+10+10-year leaseback agreement to Kingston Funerals, returning $144,625pa plus GST.

51-53 Surf Coast Highway, Torquay
The home of Bells Beach Backpackers sold for $2.15 million to a private investor, on a 4.1% yield. The 1,463sqm site is zoned General Residential and has a 2-level building. It sold with a passing income of around $90,000pa until September 2023.

24 Lakeview Drive, Lilydale
An investor paid $1.6 million for the 885sqm site home to Lakeview Childcare centre, which has a 10-year net lease to 2025 with a further 10-year option. It is licenced for 38 places and returns $71,380pa net plus GST.

Camberwell Junction Tells A Successful Tale
Retail leasing activity across Camberwell Junction has continued throughout Melbourne’s latest lockdown, with national retailers looking beyond COVID and taking space across the famous lifestyle precinct.

Book sellers Dymocks is moving out of Camberwell Place to 208-210 Camberwell Road, just metres from the busy Junction itself and adjacent to the landmark Rivoli Cinemas, and close to bars, restaurants and car parking.

David Bourke of Fitzroys negotiated the 5+5-year lease at $120,000pa. He said Dymocks committed to the long-term deal with an eye to the post-COVID period, with the location allowing for extended trade and the opportunity to leverage off the cinema and restaurant traffic.

“Dymocks has been trading successfully in the suburb for over 20 years, and its decision to look for a more immediate shopfront in the location is testament to the area’s fundamentals that have made it a strong performer over many years and throughout the COVID period,” Bourke said.

Meanwhile, Solomons Flooring is setting up at the northern end of Burke Road following a deal negotiated by Fitzroys’ Tom Fisher. The high-exposure site at 682 Burke Road, close to the Prospect Hill Road intersection, was leased at $55,000 per annum on another long-term 5+5-year deal.

Burke Road – the major component of the Camberwell Junction precinct – achieved the biggest improvement in vacancies of Melbourne’s shopping strips throughout the COVID period, according to Fitzroys’ latest Walk the Strip report, firming from 11.3% to 7.3%.

Fisher also recently secured Bendigo Bank on a three-year term at 499 Riversdale Road, immediately next door to the corner building at Camberwell Junction, and 564 Burke Road to Buff Nails in a 5-year deal.

“Camberwell Junction stands to benefit from ongoing residential development and the region’s growing office market, as flexible working arrangements become more widely accepted and put a focus on highly-accessible inner-suburban locations with quality retail, hospitality and lifestyle amenity,” Fisher said.

“Melbourne’s shopping strip precincts provide something that the online world can’t. A visit to the local shopping strip is anticipatory. They satisfy a need for social and physical interaction, and provided a change of scenery during the day while Melburnians have endured lockdowns.”

CBD Hotel Changes Hands
An investor has bought the City Limits hotel building in the CBD’s Chinatown precinct, and the adjoining car park, for $14 million. The new owners plan on refurbishing the hotel at 20-22 Little Bourke Street and redeveloping the car park at number 18.

The combined triple-fronted 471sqm site has a 9-level building with 32 strata-titled studio apartments.

The vendors, the Hong Kong-based Chow family. bought the property in the 1990s for less than $4 million.

New Richmond Development Pocket Emerges
A company linked to developer Little Projects is paying around $20 million for the long-held Geoff Bade premises in Richmond, across the road from a site recently bought by Fortis and earmarked for a $90 million mixed-use development.

LPC, owned by Little Projects directors Paris Lechte and Leighton Pyke, put a caveat on the 1,461 sqm site at 9-15 Brighton Street.

Fortis paid $19 million for the 1,300sqm 8 Brighton Street corner site last year, and has lodged plans for a 13-storey building with 70 apartments and 2,100sqm of office space.

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.