Weekly Wrap

Fitzroys Weekly Wrap - 23rd November 2018

Posted on 23rd November 2018

Retail Sale, 85 Puckle Street, Moonee Ponds
An investor acquired the vacant two-level 170sqm shop and dwelling for $2.285 million after a strongly contested auction which generated 118 bids.

Retail Sale, Level 1, 674-680 Glenferrie Road, Hawthorn
The 1,026sqm first floor premises of nightclub Room 680 sold for circa $4 million. The space has four separate entrances and a 7am liquor licence for up to 900 patrons.

Retail Sale, 253-255 Lennox Street, Richmond
Zoned Neighbourhood Residential, the vacant 176sqm corner site has a two-level building of 306sqm with two shops and a three-bedroom residence, and sold for $2.22 million.

Retail Sale, 376 Clarendon Street, South Melbourne
A local investor acquired the vacant 178sqm double-storey building, formerly used as a medical clinic, for $1.31 million.

Retail Sale, 1136 Glen Huntly Road, Glen Huntly
The two-level shop and dwelling of 145sqm sold for $950,000 at a 4.1% yield, and is leased until 2022 with options to Tobacco Station.

Retail Lease, 181 Little Collins Street, Melbourne
Vintage-inspired fashion label Olga de Polga has leased the 37sqm CBD space on a four-year deal from GPT at $2,432/sqm, adding to its stores in Prahran and Fitzroy.

Retail Lease, 251 High Street, Prahran
Jethro Canteen is expanding from Richmond, inking a six-year lease at $32,000pa net for the 85sqm space.

Retail Lease, 298-300 Bay Street, Port Melbourne
Symmetry Physiotherapy has leased the 172sqm double-fronted shop for five years at $75,250pa net.

Office Sale, Level 1, 43 Bourke Street, Melbourne
An owner occupier paid $1.25 million for the 157sqm floor, located within a three-level brick building on the corner of Liverpool Street.

Office Sale, Level 3, 620 Bourke Street, Melbourne
The vacant 252sqm corner space sold to a first-time Australian property buyer for $2 million.

Office Lease, Level 5, 343 Little Collins Street, Melbourne
IEMC is relocating to the partially-fitted 98sqm suite, agreeing to pay $515/sqm gross on a three-year term.

Office Lease, Level 10, 520 Collins Street, Melbourne
Executive Health Solutions agreed to a six-year lease at circa $550/sqm over the 297sqm office.

Industrial Sale, 9-15 Vision Street, Dandenong South
Direct Mail & Marketing sold its recently constructed 3,439sqm facility, on a 6,061sqm site, as part of a leaseback deal struck at a 6.29% yield.

Industrial Sale, 56-64 Thomas Murrell Crescent, Dandenong South
A private investor picked up the Australian Paper Recovery facility of 3,909sqm for $4.8 million from Endeavour Corporation (Australia) Pty Ltd at a 7.92% yield. It is on a 7,513sqm Industrial 2-zoned site and has a five-year lease with options.

Industrial Sale, 113-117 Dryburgh Street, North Melbourne
The 406 sqm vacant site has a 582sqm office and warehouse building and 15m frontage, and sold for $2.71 million.

Industrial Lease, 249 Wickham Road, Moorabbin
Taubman’s Paints is moving into the 418sqm space showroom after signing a 5+5-year lease at $65,000pa net.

Industrial Lease, 478 City Road, South Melbourne
Melbourne Scooters signed a 3+3-year lease over the new 195sqm warehouse at $75,000pa net.

Greensborough sale shows green shoots for child care assets: Child care centre operators are beginning to feel the benefits of the Federal Government’s recently introduced $3.5 billion Child Care Subsidy package, spurring confidence from investors looking for quality, well located assets.

Chris Kombi and Terence Yeh of Fitzroys sold the St Helena Early Learning Centre in Melbourne’s north-east growth corridor suburb of Greensborough for $7.26 million, at a 5.95% yield to a local investor, following an expressions of interest campaign in conjunction with CBRE on behalf of a private owner.

The prominent 4,224 sqm site at 189 St Helena Road has a 1,001 sqm purpose-built facility and is licensed for 120 places. It currently returns $432,000pa plus GST on a new 15-year lease, with three further terms of five years and fixed 3% annual increases.

“Amid reporting about a general oversupply of centres, demand from investors in some metropolitan areas remains strong, especially for new state-of-the-art centres such as this, which include large, valuable underlying land holdings,” Kombi said.

He said the tenant, Childcare Opportunities, which trades as St Helena Early Learning, has spent more than a decade in the construction and operation of childcare centres.
“The property’s build and selected location reflected their experience in the industry, and investors took note of this in big numbers.”

Publicly listed operators have declared in recent weeks that industry concerns of an oversupplied market have passed, and revenues, occupancy rates and “days sold” have been increasing as the sector begins to absorb the benefits of the Child Care Subsidy following a transition period after its introduction in July. The Subsidy quickly took child care costs from long-term highs to historic lows.

Yeh said the 189 St Helena Road site is strategically located close to a number of primary schools within one and two kilometres, a factor typically associated with strong demand for childcare services.

Queen Vic Market prompts local redevelopment: A North Melbourne corner site of 472sqm opposite the Queen Victoria Market, with a 65m frontage and currently comprising four two-level shops, has sold for $7.775 million. Zoned Capital City 5, the 268-276 Victoria Street site is primed for a future mixed use development on the edge of the CBD and directly across from the Market precinct that is undergoing significant change.

A few metres away, three adjoining retail freeholds on a 340sqm site at 106-110 Peel Street, next to the La Porchetta restaurant, sold for $4.98 million with a permit for a seven-level mixed use project.

On the other side of the CBD, developer Tim Gurner has acquired the former Church of Our Lady of the Assumption corner site of 1,550sqm in South Melbourne for around $10 million. The 77 Park Street and 286 Kings Way property currently has a G8 Education child care centre operating from the church, in addition to other commercial buildings, and traded with a permit for 44 apartments as well as six townhouses conversions within the church.

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.