Weekly Wrap

Fitzroys Weekly Wrap - 19th July 2019

Posted on 19th July 2019

000 Retail 05

759 Glenferrie Road, Hawthorn
The 2-level 150sqm freehold is on a Commercial 1-zoned site which sold for $1.494 million, with a short-term income of $70,073pa plus outgoings and GST.

Shop 11, 325 Manningham Road, Lower Templestowe
The 54sqm shop located within the Woolworths-anchored Manningham Plaza, sold for $865,000 at a 4.1% yield, with a 5-year lease to Subway.

141 Queen Street, Melbourne
Modern south-east Asian cuisine venture Red Spice Road signed a 15-year lease over the 853sqm upper ground floor with mezzanine at $770/sqm gross.

000 Offices 05

42 Cambridge Street, Collingwood
A Sydney-based financial services firm purchased the red-brick fronted, architecturally renewed three-level converted warehouse of 593sqm for $5.75 million to establish its Melbourne operations.

480 Collins Street, Melbourne
Print On Collins inked a 5-year deal over the 83sqm space at $130,000pa.

9 Yarra Street, South Yarra
BDA Marketing Planning agreed to an 8-year deal over the 258sqm level 15 office at $835/sqm.

693 Burke Road, Camberwell
Amity Building Group leased the 170sqm level 1 office at $428/sqm gross.

801 Glenferrie Road, Hawthorn
Adapt Capital leased the 420sqm space on a 3-year deal at around $385/sqm.

6/1 Milton Parade, Malvern
Ace Sports Clinic signed a 10 5 5-year lease over the 200sqm corner suite, with 8 on-site parking spaces, at $85,000pa.

20 Atherton Road, Oakleigh
The Victorian Civil & Administrative Tribunal is opening its first court outside of the CBD, signing a 10-year lease over the 1,050sqm building at around $300/sqm net.

000Industrial 05

5-11 David Lee Road, Hallam
Velcro Australia sold the 2,777sqm office and warehouse, on a 10,353sqm site, to an investor/developer for $5.05 million with a 6-month leaseback in place.

43-47 Northgate Drive, Thomastown
Developer Costin Investments paid $4.3 million for the 9,000sqm site over two titles, which has a 2,700sqm office and warehouse building.

73 Maida Avenue, Sunshine North
An owner occupier purchased the new office and warehouse building for $798,000.

177 Salmon Street, Port Melbourne
Reliable Plumbing leased the 854sqm office and warehouse in a 5-year deal at $230/sqm net.

2 & 3, 18-24 Ricketts Road, Mount Waverley
XBlades Sports Australia leased the 1,330sqm property, which has a 466sqm office and showroom space, at $128/sqm in a 5-year deal.

000 Development 05

416-418 Sydney Road, Brunswick
A local developer paid $2.6 million for the triple-fronted, 445sqm former NAB Bank site, which is zoned Commercial 1 and within the Brunswick Activity Centre. The vacant property currently has a 325sqm building with double-height ceilings.

000 Talking Points 05

Service Retail Surge Attracts Local and Offshore Investors to Premium Suburban Asset

Local and offshore competition for a first-class suburban commercial and medical asset has led to a strong $9.47 million sale, as investors seek securely leased properties in Melbourne’s shopping strips amid growing demand for service retail.

Fitzroys agents David Bourke and Terence Yeh, in conjunction with Savills, sold the prominent two-level building of 1,336sqm at 789 Pascoe Vale Road in Glenroy on behalf of a private investor/developer.

Bourke said the competitive Expressions of Interest campaign and subsequent strong result was driven by the commanding property’s blue-chip tenancy profile and secure lease terms, with a weighted average lease expiry of more than eight years.

The premium freehold was entirely refurbished in 2017 and is fully leased to tenants the Commonwealth Bank, Modern Medical (part of Zenitas Healthcare Group) and real estate agency Ray White.

A local private family purchased the asset at a 5.25% yield.

The high-profile building is divided into three separate modern spaces across two levels, including three ground floor tenancies, with Modern Medical occupying one as well as the entire first level. It is on a Commercial 1-zoned landholding of 910sqm, and has a prominent frontage of 19.91m to Pascoe Vale Road and rear access.

“With the recent cuts to the official interest rate, buyers are recognising that now is an ideal time to secure strong income-producing commercial property assets,” Bourke said.

“Service retail is coming to the fore across Melbourne’s shopping and retail precincts, in response to the city’s nation leading population growth. Melbourne’s strip centres are home to a growing number of health and personal care businesses.

Amid changes in the retail environment, it remains difficult for the online world to replicate this service offer, and well- located properties with secure leases to blue-chip tenants will continue to attract strong investor demand,” Yeh said.

The vendors had completely revitalised the building, repositioning the property as a modern, premium suburban commercial asset, and further enhancing its prospects as a long-term investment holding.

The property benefits from its direct proximity to the Glenroy train station, connecting the site to the Melbourne CBD and wider transport network, a number of bus routes, and is also close to the Western Ring Road and Tullamarine Freeway, with ample surrounding public car park options just metres from the property.

Another Landmark Deal in Melbourne’s Booming Office Market
A Charter Hall-led consortium has acquired Telstra’s headquarters in the CBD’s east end for $830 million.

The deal is the latest major transaction in the Melbourne office market, following Dexus acquiring 80 Collins Street for $1.476 billion.

Charter Hall, together with its Charter Hall Prime Office Fund and Canada’s Public Sector Pension Investment Board, acquired the 47-storey, circa-66,000sqm office tower at 242 Exhibition Street at a yield of around 4.5%. Telstra’s lease over the building runs until 2032.

Nearby, Charter Hall’s $600 million Wesley Place development on Lonsdale Street is currently under construction.

Prime rents could rise a further 30% to 40% in the city over the next five years, according to BIX Oxford Economics, and ongoing strong tenancy demand will keep vacancy rates low throughout a period that will see around 250,000sqm of new office stock brought to the market.

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 2019 Fitzroys.