Weekly Wrap

Fitzroys Weekly Wrap - 31st May 2018

Posted on 31st May 2019

000 Retail 05

13 Smith Street, Fitzroy
The brand-new 90sqm space sold to an investor for $805,000, at a 6.2% yield, with a 3+3-year lease returning $50,000pa plus GST. It is on the ground floor of Neometro’s seven-level Nine Smith Street mixed-use development.

3-11 Mitchell Street, Doncaster East
Located within the Pace of Doncaster East development, the 302sqm premises of Chinese restaurant Wonderbowl sold for $2.355 million at a 5% yield.

82-84 Warburton Highway, Yarra Junction
The Zagame family sold the 3,500sqm Woolworths-anchored Yarra Junction neighbourhood centre for around $19 million, reportedly to Ari Herszberg and Sam Herszberg. As well as Woolworths, the centre has 11 specialty stores that include an optometrist, bakery, chemist, and Bendigo Bank for a combined annual return of $1.3 million.

56, 56A & 58 Church Street, Brighton
Global cosmetics retailer Mecca Cosmetica leased the ground floor space at $268,000pa.

6/26 Church Street, Brighton
Nearby, clothing retailer Morrison took the 94sqm space at the entry of the Dendy cinema and shopping complex at $120,000pa.

000 Offices 05

16 Robert Street & 15 Glasshouse Road, Collingwood
A local investor paid $2.050 million at a 6.6% yield for the converted office and warehouse buildings of a combined 465sqm, on a 470sqm site. Co-working group Savant House has a new 5-year lease over Glasshouse Road returning $70,200pa net, and the short-term lease over Robert Street brings $66,000pa.

193 Bay Road, Sandringham
A co-working group will operate from the 440sqm office, showroom and warehouse building after paying $1.3 million plus GST for the a 580sqm Mixed Use zoned site.

Unit 2, 168-179 Christmas Street, Fairfield
A local investor purchased the 190sqm two-level office for $584,000.

102 & 103, 685 Burke Road, Camberwell
The office suites totalling 154sqm sold for $660,000 to a purchaser that will consider owner occupation. Current return from the suites is $37,000pa net.

343 Little Collins Street, Melbourne
An owner occupier purchased the 92sqm strata suite for $625,000.

Level 5, 90 William Street, Melbourne
Global minimalist fashion label, Japan-based Muji, signed a 5+3+3-year deal over the 292sqm character space within Scottish House at $116,000pa. Muji signed the lease ahead of opening its new 1,700sqm Australian flagship store in Chadstone in August.

982-984 Toorak Road, Camberwell
Kinesiology Connection leased the refurbished office space of 314sqm, with 17 parking spaces, at $65,000pa net.

000Industrial 05

104 Watt Road, Mornington
An investor purchased two warehouses on the corner block fronting Milgate Drive for $890,000, at a 5.05% yield.

5 Clive Street, Springvale
A local investor purchased the 660sqm mechanics workshop for $1.34 million, over which long-term tenant On The Run Motorsports recently signed a new 5-year lease at $64,500pa net.

17/266 Osbourne Avenue, Clayton South
An owner occupier bought the vacant 245sqm property, which includes a 55sqm office and four on-title parking spaces, for $459,500.

1 & 2/50 Access Way, Carrum Downs
The newly constructed office and warehouse properties have a combined building area of 5,062sqm and were leased on a 7+7+5-year deal at $445,950pa plus GST.

000 Talking Points 05

Revitalisation of a Melbourne icon brings historic retail opportunity:

A major upgrade of the iconic Capitol Arcade in Melbourne’s CBD has been completed in line with an historic revitalisation of the Capitol Theatre, and presents a chance for retailers to set up shop within a world-class arts facility and tourist attraction.

Capitol Arcade, which runs from the theatre’s foyer on Swanston Street through to Howey Place, and the Capitol Theatre make up two of three components of the Capitol House building, which also has 63 residential apartments across the upper floors.

Capitol House is a National Trust and Victorian Heritage registered property on the basis of its architectural, historical, aesthetic and technical significance.

Designed by Walter Burley Griffin and Marion Mahony Griffin, the Capitol Theatre opened in 1924 to great acclaim for its architectural features, including a geometric plaster ceiling with some 4,000 coloured lamps nestled behind, as well as reinforced concrete, stained glass details and spatial arrangement.

Fitzroys is the facilities and owners corporation manager of Capitol House. Senior Owners Corporation & Asset Manager, David Gluck is responsible for overseeing and co-ordinating the wishes of the owners of 93 shops, apartments and the Capitol Theatre.

This took in the entirety of the revitalisation process, beginning with the design phase, which saw renowned architecture firm Six Degrees appointed following on from their work with RMIT on the $25 million-plus Capitol Theatre overhaul.

The process also included costings, putting the project to tender, and presenting the client with recommendations. Information evenings were held with apartment and shop owners.

“The Arcade was tired and outdated,” Gluck said. “We identified that there was overwhelming support from owners to see the arcade and entry revitalised and so we worked hard to ensure the momentum was sustained. We are certainly seeing a strong push at the moment generally from investors within Owners Corporations to revitalise ageing assets, and this includes refurbishments of lobbies, walkways, facades and lifts.

“However, not a lot of owners corporations would undertake works of this size in a commercial setting.”

Meanwhile, RMIT had seen a chance to revitalise the historic Theatre not just for use as an arts education hub, but as a publicly accessible events and performance space.

Peter Malatt, Director at Six Degrees, said the project brief sought to modernise the tired look of the Arcade and fit the design intent on the Theatre upgrade, while all tenancies required continual trading.

“The overall effect is to use a simple palette of mirrors, steel, neon and concrete to present the arcade as a modern and cinematic experience,” he said.

As well as an overhaul of signage and spatial elements, an emphasis was also put on wayfinding.

“Our favourite arcades are the great 19th and early 20th century arcades like The Block Arcade, the Manchester Unity and the Nicholas Building arcade,” Malatt said.

“These are not ‘straight’ arcades, and rely on their sophisticated interiors and lighting to draw people into and through the spaces.”

Works included removal of the 1990s plaster ceilings to reveal the building structure and services and maximise height; the introduction of mirrored details and LED strip lighting to add visual interest and lead the shopper through the arcade; new neon signage at each end of the arcade to enhance branding; new digital signage at each end of the arcade to effectively advertise the tenants to the street; and restoration of the entry canopy lighting and signage.

An upgrade of the entry included steel elements in common to the RMIT Capitol Theatre upgrade, and recognition of the heritage importance of the building was made with an interpretive panel showing the original Theatre entrance.

Gluck said construction was overseen on a day-to-day basis. Works were undertaken through the night and packed up by morning.

“We went into the project with aim of not closing the arcade for one day during the works, and causing as little disruption as possible to retailers, and we achieved that.”

“Retailers need to keep trading, and residents need to keep living.”

“The dual role of on-site facilities management skillset and technical expertise of owners corporation management provided a competitive edge and allowed this complex $1.25 million project to be undertaken.”

Fitzroys is the leasing agent for a large shop in Capitol Arcade that has been subdivided into three spaces to meet the current retail demand, expected to be spurred further by the reintroduction of a Melbourne icon to the city’s globally renowned cultural scene.

Cadence attuned to Hawthorn East:

Developer and funds manager Cadence Property Group has acquired a Hall Street site in the Hawthorn East commercial and industrial precinct for $6.5 million for its new headquarters, winning out from huge interest in the property that reaffirmed the area’s blue-chip status.

Fitzroys agents Chris James, Jordan Ceppi and David Bourke negotiated the sale of 1-5 Hall Street following an Expressions of Interest campaign on behalf of a private investor who had held the property for more than 20 years.

The 1,650sqm site boasts three frontages and has two adjoining office and warehouse facilities with a combined building area of 1,625sqm.

Timber exporter Aushang International has 3.5 years remaining on its lease over 1 Hall Street, while tech firm SXiQ has a short-term lease over 3-5 Hall Street. Cadence will move in on expiry of the latter deal, and will consider the site’s development potential over the long-term.

Disclosure: 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 2019 Fitzroys.