Weekly Wrap

Fitzroys Weekly Wrap - 18th March 2022

Posted on 18th March 2022

000 Retail 05

172-174 Ocean Beach Road, Sorrento
An investor bought the 396sqm building on a 412sqm triple-fronted site for $6.7 million, at a 2.4% yield. Tenants include café Buckley, run by Only Hospitality’s Julian Moussi, and clothing retailer Sorrento Collective.

570 Burwood Road, Hawthorn

A family sold the 330sqm building after 60 years of ownership for $2.76 million. The property, zoned Commercial 1, had been occupied by Tee Shirt Graphics for 50 years and recently became vacant.

338 Smith Street, Collingwood

Formerly home to framing shop Picture Box, the 200sqm 2-level building on the corner of Johnston Street sold for $2.72 million to an owner-occupier with plans for a hospitality venue.

121 Elizabeth Street, Melbourne

Entertainment venue Maniax Axe Throwing leased the 755sqm basement space for 7 years at around $250,000pa.

537 Upper Heidelberg Road, Heidelberg

Oz Car Group leased the 5,606sqm site, formerly home to Heidelberg Mitsubishi, for 5 years at $450,000pa plus outgoings and GST.

000 Offices 05

202 Jells Road, Wheelers Hill
Owner-occupiers bought 2 suites within the office building. Suite 1.02, of 47sqm, sold for $315,000 while the 79sqm Suite 2.01 sold for $525,000.

55 Swanston Street, Melbourne

Building services firm A.G. Coombs leased the 75sqm level 3 office for 2 years at around $600/sqm.

000Industrial 05

2 Sigma Drive, Croydon South
An owner-occupier bought the 731sqm office and warehouse for $2.3 million. The property also includes 13 on-site parking spaces.

45 Power Road, Bayswater

Zoned Industrial 1, the vacant 1,946sqm industrial development site sold for $1.985 million.

45-49 Sackville Street, Collingwood

Beyond Best Personal Training leased the 668sqm office and showroom building for 5 years at $150/sqm.

000 Development 05

35 Hyland Street, Fyansford
A Cotton On co-founder paid $7.15 million to developers ICD Property and Supulai for sites within the Gen Fyansford master-planned community. The 4.8ha lot is zoned Commercial 1 and permitted for a shopping centre, offices and community facilities. It was bought alongside the smaller 51-59 Hyland Street site, which is zoned Mixed Use and can be used for apartments.

140-144 Police Road, Springvale

Zoned General Residential 1, the 1,829sqm site sold to an interstate developer for $3.1 million. A scheme is in place for a 126-place childcare centre.

11 Yarra Street, Geelong

A developer with plans for a 7-level office building paid $1.9 million for the 340sqm site, which is opposite Westfield Geelong.

000 Specialised 05

186 Seaford Road, Seaford
An investor bought the childcare centre facility for $2.325 million. Busy Bees has a renewed 10-year lease to 2029 with a 10-year option over the 1,252sqm site, which is licenced for 40 places and returns $91,087pa plus GST.

000 Talking Points 05

Profound Prospects for Doncaster Hill Megasite
Arguably metropolitan Melbourne’s best landbank and development opportunity, prominently located on Doncaster Hill, is available for sale.

The site is located on the doorstep of Westfield Doncaster, in one of Melbourne’s fastest growing and most affluent eastern suburbs. Fitzroys’ David Bourke, Shawn Luo and Paul Burns, in conjunction with Colliers, are marketing 2 Frederick Street, Doncaster on behalf of an entity linked to the ASX-listed tenant Hansen Technologies via an Expressions of Interest campaign closing Wednesday, 13 April at 2pm.

Expectations are in the mid-$20 millions range.

The 7,550sqm mega-site boasts dual frontages and comprises a 3-level 3,707sqm office/data centre building. It is fully leased on a 5-year term until 31 December 2024 with no further options, returning $770,273 per annum.

The property is located in the Doncaster Hill Major Activity Centre, which as part of Plan Melbourne seeks to accommodate housing and population growth and encourages intensive development as a focus for housing, business, shopping, working, leisure, transport and community facilities.

“This is one of the best landbank and development opportunities in Melbourne,” Burns said.
“We expect this one to be hotly pursued. It’s one of the last major sites to be developed in Doncaster Hill, which is one of metropolitan Melbourne’s highest points. Developers have what is an increasingly rare chance to capture stunning views to the Melbourne CBD as well as Box Hill, Port Phillip Bay, the Dandenong Ranges and Macedon Ranges, in a highly- connected location at the doorstep of Westfield Doncaster.

“The purchaser will earn a reliable cash flow from an ASX-listed tenant while assessing the development options encouraged in the Major Activity Centre zoning.” Hansen Technologies is a global provider of software and services to the energy, water and communications industries, servicing more than 600 customers in over 80 countries.

Bourke said prudent developers have competed strongly for recent offerings in the area.

“This is a proven location for demand of the end product, high quality apartments. Doncaster Hill’s population has already increased by over 500% since 2011, and it’s expected to increase by 235% from 4,800 residents in 2019 to 11,300 by 2036, demanding 5,500 dwellings.

“The Doncaster apartment market is exceptionally mature. Its unique offering of significant local amenity headlined by Westfield Doncaster, spectacular views, and high connectivity to public and private transport all contribute to its ability to absorb and support ongoing demand for quality apartment accommodation.

"Middle-ring locations with quality lifestyle attributes have proven particularly popular with Melburnians as flexible working arrangements become commonplace.”

Doncaster’s median house price has increased by over 18% in the past 12 months and the demand for apartments in the location will remain strong as the gap between established houses and apartments continues to broaden.

The property is moments from Doncaster Road and multiple bus routes, and close to the Eastern Freeway, and is set to be future-proofed by the future Suburban Rail Loop and major expansion of Westfield Doncaster in the coming years.

The city-shaping Suburban Rail Loop will connect the Doncaster Hill precinct to every major rail line and Melbourne Airport.

Westfield Doncaster is set to grow by up to one-third in size. An additional 43,000sqm of retail floor space and 18,000sqm of commercial office space will be introduced at Westfield Doncaster, as well as an enhanced and expanded bus interchange, nearly 2,800 new car parking spaces for a total of 7,575, and new bicycle facilities.

Milkrun Makes Melbourne debut
Fresh from a $75 million raise, grocery delivery start-up sensation Milkrun is making its Melbourne debut in South Yarra.

Fitzroys Senior Manager - Agency, Lewis Waddell negotiated the 3+3-year for the Ground Floor of 60 Wilson Street.

Launched in September, Milkrun has quickly expanded to now operate in 35 suburbs across Sydney. Using a network of warehouses - known as dark stores - Milkrun stocks up to 2,000 grocery products that its own riders on e-bikes deliver to customers within 10 minutes of ordering via the Milkrun app.

The 400sqm Wilson Street space will be used as Milkrun’s first Melbourne dark store for products to be picked and then delivered by riders, as well as for office space.

“This densely populated inner-city catchment is the ideal place for Milkrun to make its Melbourne debut,” Waddell said.

“South Yarra is undergoing a transformational period that is bringing yet more residential and commercial developments, which will further boost the catchment.

“Milkrun’s decision to set up in Melbourne here is a huge vote of confidence in the future of South Yarra.”

Waddell said the triple-fronted ground floor premises at 60 Wilson Street provided easy access for Milkrun’s riders.

“The flexibility of the open-plan space drew interest from office, retail, fitness and medical users. Businesses are keen to get into a highly accessible area close to famous Chapel Street and its lifestyle and hospitality amenity,” Waddell said.

Milkrun, founded by former Koala mattresses CEO Dany Milham, has just completed a $75 million capital raise backed by major US fund Tiger Global Management, and local funds AirTree Venture, Skip Capital and Grok Ventures, as it sets about the expansion path. Milkrun is a vertically integrated business that employs its own delivery riders and sources its own food that is stored in its own warehouses. It is expected to grow to 1,000 employees in the coming months.

The 60 Wilson Street building has now become a start-up hub. On level 1 of the building is the world headquarters of global start-up and entrepreneurial publication Foundr Magazine, which Fitzroys leased in 2020.

Night-Time Economy In Focus
The City of Melbourne has identified the twilight as a massive growth area for the night-time economy as the CBD emerges from 2 years of lockdowns and restrictions.

The City of Melbourne's Night-Time expert committee has made recommendations to the City of Melbourne and the Victorian Government that include extended opening hours, increased activations and a new marketing campaign to support local businesses across the entertainment, arts and retail sectors to keep more people in the city after work.

Prior to COVID, Melbourne’s night-time economy was the fastest-growing in Australia, generating $3.5 billion annually and supporting 31,000 jobs.

Established in 2021, the Night-Time expert committee has previously designed the Melbourne Money program. The current version of the program offers 25% rebates to diners of up to $125 across the City of Melbourne from Mondays to Thursdays.

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.