Weekly Wrap

Fitzroys Weekly Wrap - 26th July 2019

Posted on 26th July 2019

000 Retail 05

272-280 Centre Road, Bentleigh
The Fleiszig family’s investment vehicle, 36th Olive Branch, acquired the 1,240sqm vacant showroom for $5.02 million. Vendors the Bodsworth family, who had operated their Centre Plumbing business from the building, offered the 1,500sqm, Commercial 1-zoned site with vacant possession.

24-38 Little Bourke Street, Melbourne
An investor acquired the vacant 238sqm ground floor retail and hospitality space, within 3-storey Gothic building Gordon Place, for $1.71 million. Gordon Place was built in 1883 and is now used as a Quest serviced apartments hotel.

Shop 1 and Shop 2, Colombo Street, Mitcham
Leased to Collector Coffee House, the 89sqm café sold for $650,000 at a 5.5% yield. Next door, the 128sqm corner premises of Chinese restaurant Elate Kitchen sold for $1.3 million, at a 5.8% yield.

Shop 7, 43-61 Doncaster Road, Doncaster East
Ramsay Pharmacy is moving to bigger premises within Tunstall Square shopping centre, signing a 5 5-year lease over the 186sqm corner space at $215,000pa net.

249 Swanston Street, Melbourne
Popular CBD bar Section 8 has leased the 300sqm level 1 space, formerly occupied by longstanding nightspot The Lounge, in a 5-year deal at $1,333/sqm to open up new venture Radar.

63 Exhibition Street, Melbourne
High-end watch and jewellery seller Monards leased the 430sqm ground-floor showroom at circa-$500/sqm, adding to its 101 Collins Street flagship nearby.

501-503 Chapel Street, South Yarra
Rustica Sourdough leased the 434sqm space for 10 years to open a combined bakery and café, Rustica Canteen.

Shops 1&2, 12-14 Claremont Street, South Yarra
Icon Construction leased the combined space at $740/sqm gross.

276-278 Chapel Street, Prahran
Gym operator BeFit will open its first Melbourne location after leasing the 550sqm space.

000 Offices 05

620 Bourke Street, Melbourne
An investor paid $1.6 million for the 179sqm Suite 101, in a corner position overlooking the intersection of Bourke and King Streets. It is leased to Kathy Jones & Associates on a 3 3-year deal that returns $79,915pa plus outgoings and GST.

82A Wellington Street, Collingwood
Private investors traded the vacant two-level 125sqm office and showroom space for $900,000.

7-11 Hill Street, Cremorne
Kane Construction signed a short-term lease over 400sqm to use as a site office during its construction of nearby 510 Church Street, and will pay $150,000pa gross.

1183 Toorak Road, Camberwell
Lion Group leased the 750sqm space, within a building owned by CoINVEST, at $440/sqm gross.

95 Coventry Street, South Melbourne
Efectiv signed a 7-year lease over the 258sqm space on level 1 of the Deague Group-owned building at $410/sqm.

000Industrial 05

39 Renver Road, Clayton
A local owner occupier paid $930,000 for the vacant 540sqm building.

2 Military Road, Avondale Heights
The former car wash site of 1,520sqm will become a drive-through fish and chip shop after a new tenant signed a 3-year lease at $77,500pa net.

43/10 Cawley Road, Altona North
Furniture company Hedgehog and Acorn signed a 2-year lease over the 224sqm warehouse, which includes a mezzanine space, at $26,000pa plus outgoings and GST.

000 Development 05

219-221 Park Street, South Melbourne

The 1,011sqm site, zoned Commercial 1, sold for $7.311 million. It currently has 620sqm of building area across five tenancies and six on-site parking spaces, with a return of $272,492pa.

000 Talking Points 05

Quiksilver Distribution Centre Rides Wave of Logistics Sector Growth
ASX-listed Centuria Industrial REIT has acquired the Quiksilver facility in North Geelong in a $22.8 million deal negotiated by Fitzroys Director, Paul Burns on behalf of a private investor.

The 3.763ha site at 75-105 Corio Quay Road comprises two modern, high-clearance industrial warehouse and office buildings connected by a fully enclosed transit area with a combined area of 21,772sqm. The southern warehouse, built circa-2010, has a clearance of 12.2m.

Late in 2018, the tenant entered a new 5 5-year lease, on a deal that returns over $1.876 million per annum with 3% annual increases. Already used as Quiksilver’s Asia Pacific distribution centre, the lease was taken after the property was chosen for the consolidation of the distribution centres of Quiksilver and the Billabong business, recently acquired by Quiksilver’s parent company Boardriders Inc., which is owned by New York-based Oaktree Capital Management and includes other retailers Roxy and DC Shoes.

Burns said Quiksilver had made a significant commitment to the property and the Surf Coast area, where they have been for many years. They recently made further upgrades to accommodate business expansion that include additional warehouse racking, office refurbishment and refitting, and increased staff amenities.

The consolidated Quiksilver and Billabong centre will see turnover at the facility go from around 4.5 million units to circa 10 million units once in full operation in the coming months. The onsite workforce is expected to increase by around 30 full-time positions and approximately 50 part-time.

“Growth in online shopping and demand for more efficient delivery and a bigger range of products across the retail industry has increased requirements for logistics systems and facilities,” Burns said.

“Industrial real estate is now among the most sought-after investment classes, and land values are expected to rise further in the coming years.”

Burns said there is heightened investor demand for strategically located logistics assets with quality fit-outs and strong lease covenants.

Burns negotiated the last sale of the property in late 2016. Then, the facility was part of a package that included an adjoining 1.244ha development parcel of land - not included in the latest deal - which sold together for $19.5 million.

Wesley Place Tower Fully Pre-committed
AustralianSuper has leased 16,200sqm within Charter Hall’s 130 Lonsdale Street tower development in the $1.2 billion Wesley Place precinct, joining other pension funds Cbus and Telstra Super as well as Vanguard and the Australian Financial Complaints Authority as tenants.

Now fully occupied, the 35-storey building will be one of three towers in the precinct in the CBD’s east end. A new tower will be constructed at 140 Lonsdale Street, and the existing Telstra-anchored 150 Lonsdale Street building will be refurbished.

BIS Oxford Economics Prime has forecast rents to rise a further 30% to 40% in the city over the next five years, with strong tenancy demand to keep vacancy rates low even 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.