Ideally-Placed Hawthorn Office Building Sells for Over $15m
Hawthorn’s emergence as an inner-Melbourne commercial and lifestyle hub has attracted the attention of local and offshore interests alike, with a premium, high-profile Hawthorn office building ideally placed to benefit from current working trends selling for more than $15 million.
Fitzroys’ David Bourke, Chris James and Shawn Luo sold 313-317 Burwood Road on behalf of private owners.
The property comprises a 1,855sqm 4-level building on a substantial 1,185sqm landholding, with dual frontages to Burwood Road and Lynch Street, and a high ratio of on- site parking with 68 spaces over 2 levels. It is home to BIG4 Holiday Parks, the Australian headquarters of fuel systems engineers Leighton O’Brien, Fuse Recruitment, and HID Accountants, with a 4.1-year WALE.
Bourke said the well-contested Expressions of Interest campaign generated multiple registrations, and a quick turnaround saw a deal finalised within 36 hours of the campaign close.
The property sold on a 3.4% passing net yield.
“Buyers were all very comfortable taking on the small leasing risk in the property,” Bourke said.
“The purchaser is a local investor who had been looking to get into the Melbourne office market for several years, and this asset ticked all the boxes in terms of its location, profile, and ideal positioning in the current market environment,” Bourke said.
“Hawthorn has emerged as a ‘one-to-watch’ among Melbourne’s commercial markets, situated in an inner-suburban sweet spot that is currently attracting tenants from central locations and further out in the suburbs. The campaign showed that reputation extends to local and offshore interests,” he said.
“Businesses and employees are favouring highly-accessible locations close to excellent hospitality and lifestyle amenity that offer an excellent work and lifestyle balance, allowing workers to easily access the workplace and collaborate with colleagues in-person while flexible working arrangements are in vogue.”
He noted that while 28 of the building’s parking spaces were vacant at the beginning of campaign, a number of those had been taken up by tenants within the building as Melbourne has reopened, suggesting that people returning to work are keen to have access to on-site parking.
The building is within Hawthorn’s fast-growing office market, surrounded by national and local corporations including Orora Group, Xero, AVJennings, FIMG and United Petroleum, and is just moments from the intersection of the vibrant Glenferrie Road retail and lifestyle strip and Swinburne University, as well as Glenferrie Station, multiple tram routes and major roads.
Fitzroys recently negotiated the leases within the building to Leighton O’Brien and Fuse Recruitment, who had both sought to optimise their office locations to be close to Glenferrie Road, public transport connections, and also take advantage of the on-site parking.
James noted that the sub-500sqm has been particularly active during the COVID period, as businesses with smaller space requirements have proven to be more agile and more willing to make commitments to leases.
Creatives Take Up Melbourne CBD Spaces as Part of Shopfront Activation Program
Empty spaces in Melbourne’s CBD are being filled as activity returns to the city.
Fitzroys’ James Lockwood and Rick Berry have negotiated the lease of spaces at 186 Little Collins Street and 148 Little Collins Street, which are part of the City of Melbourne and Victorian government’s $2.6 million Shopfront Activation Program, designed to reinvigorate key areas of the city and transform empty shopfronts into creative spaces, bespoke displays and pop-up shops.
Australian fashion label Informale, which blends men’s tailoring, European inspirations and casual wear, is moving into 186 Little Collins Street, while mental health organisation LIVIN has leased 148 Little Collins Street.
LIVIN uses apparel to start conversations on mental wellbeing, and launched its Melbourne designer's range for Melbourne Fashion Week with a brief to young, local, up-and-coming designers to reflect life in Melbourne and break stigma of talking about how they are feeling.
LIVIN will also be using the space to host 45 minute sessions on mental wellness and how people can help themselves and those around them.
The Shopfront Activation Program gives low or no-cost space to artists, budding entrepreneurs and artisan makers to the test their business ideas and help attract Melburnians back into the city. The leases were struck on 4-month terms.
“Melbourne is known for its creativity, and this is an excellent opportunity to showcase some of the its most innovative labels, businesses and organisations as Melburnians reconnect with each other and the city,” Lockwood said.
“Fitzroys is pleased to be involved in a program that is assisting in bringing the CBD back to life.”
He added, “Landlords have been happy to engage to activate their shops in the hopes of securing long-term leases.”
The program forms part of the joint City of Melbourne and Victorian government’s $100 million Melbourne City Recovery Fund.
Flinders Street Office Tower Sells for $80m
Fund managers Marprop and Futuro Capital have bought the 300 Flinders Street office building occupied by Victoria University for $80.8 million.
Victoria University has a lease over the 21-storey tower until October next year, when it will be moving to a new $400 million campus on Queen Street currently being developed by ISPT.
The 14,000sqm space in the tower overlooks the Yarra River and Flinders Street Station. Marprop and Futuro Capital plan on refurbishing the building.
The vendor, Singapore-listed Hotel Grand Central, acquired the building from Victoria University in 2013 in a sale and leaseback deal.
Earlier this year, Futuro Capital acquired the Tivoli Arcade and car park at 235-251 Bourke Street after it bought the 14-storey, 23,500sqm office building component of the property from RMIT University with a 5-year leaseback.
Meanwhile, Swinburne University sold the century-old CBD building known as Invicta House, at 226-232 Flinders Lane, to Swiss fund manager Fidinam for $40 million. It is also set to be refurbished.
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.