Hawthorn’s emergence as 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.
The property comprises a 1,855sqm four-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 two 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.
“Investors understand that more businesses will be moving into this segment of the market amid ongoing reassessment of space requirements, and that tenants had sought out this particular building in the current environment. This has delivered the asset reliable long-term income streams and supported the strong WALE profile, providing confidence for buyers in ongoing demand.”