Weekly Wrap

Fitzroys Weekly Wrap - 15th July 2022

Posted on 15th July 2022

138-140 High Street, Cranbourne
The 187sqm building leased to 2 eateries on a 660sqm site sold for $2.485 million, on a 3.57% net yield. Spicy Flames has a 5+5-year lease and Encore Pizza a 3+3-year lease, returning a combined $91,793pa.

29-31 Ranelagh Drive, Mt Eliza

An investor bought the 2 shops on 1 title for $1.52 million. The property has a combined 125sqm building area on a 192sqm site. Number 29 is vacant and number 31 has a new 5+5+5-year lease to burger bar The Famished Wolf returning $42,000pa plus GST.

747 Glen Huntly Road, Caulfield

An investor bought the 2-level 123sqm building on a 283sqm site for $930,000, on a 3.01% net yield. STR Holdings has a 1+2+2+2-year lease returning $30,000pa.

37 Bank Street, Cobram

The 993sqm showroom leased to Pets Domain, on a 1,204sqm site, sold for $2.16 million on a 6.01% yield.

302 Glen Huntly Road, Elsternwick

The 66sqm strata shop sold for $670,000 with a short-term lease to longstanding tenant United Church local op shop returning $39,000pa.

350 Doncaster Road, Balwyn North

A flooring company leased the 80sqm space for 3 years at $38,000pa plus outgoings and GST.

401-403 Nepean Highway, Frankston
A not-for-profit organisation paid $5 million for the vacant 2-level 982sqm office building on a 1,575sqm site with 39 parking spaces.

318 Queen Street, Melbourne

A law firm bought the 515sqm unfitted shell for $3.6 million. It is within Beulah International’s redevelopment of the former Celtic Club site.

89 Wellington Street, St Kilda

A group of local architects bought the vacant 537sqm property, which has 2 levels of office and basement parking, for $3.25 million.

22 Bruce Street, Mornington

The vacant 1,015sqm office and warehouse on a 2,181sqm corner site sold for $2.62 million.

102-104 Merola Way, Campbellfield

The 1,140sqm office and warehouse on a 1,490sqm site sold for $2.4 million.

7 Yazaki Way, Carrum Downs

Jet Technologies leased the office and warehouse facility formerly occupied by Remedy Kombucha for $225,000pa.

2/26 Lacey Street, Croydon

The 478sqm office and warehouse with multiple mezzanines sold for $960,000.

8-12 Power Street, Hawthorn
A local developer paid $14 million for the Uniting Church West Hawthorn landholding. The 6,715sqm site also has frontages to Grove Road and Elgin Street. The church building, constructed in 1910 and another smaller building are protected from demolition.

3 Dickasons Road, Heathmont
The 110sqm medical centre property on a 909sqm site sold for $1.25 million, on a 4.59% passing yield.

Outstanding Abbotsford Value-Add and Development Opportunity
The former Carlton & United Breweries headquarters and adjoining land in Abbotsford have come to the market, offering significant value-add and development potential as the suburb emerges as the next city fringe office hotspot.

Fitzroys’ Paul Burns and Chris James are marketing 2-6 Southampton Crescent, 27-29 Duke Street & 36 Bond Street, Abbotsford in one line via an international Expressions of Interest campaign closing Friday 5 August at 3pm.

Expectations are in the early to mid-$20 million range.

The offering comprises the part-refurbished distinctive curved office/laboratory building at 2-6 Southampton Crescent with 6,048sqm of net lettable area (NLA), originally built in 1928 for Kodak. In addition, there is a parcel of adjoining land (currently with leased warehouses) which has an approved permit for development.

The VCAT-approved permit for an additional 5,107sqm, 9-level commercial development (with 129 parking spaces) is on the Duke and Bond Street land which abuts 2-6 Southampton Crescent. When fully developed, the property’s NLA will be 10,484sqm.

Combined, the offering encompasses 3,099sqm of land opposite Carlton & United Breweries’ famous Yarra River brewery.

The 2-6 Southampton Crescent building is currently 28% leased to ASX-listed Starpharma, which has just exercised its 5-year option in a vote of confidence for the property and Abbotsford. Gross passing income from the property is $840,000, however there is considerable upside from this level.

“We’re expecting interest from value-add buyers, developers and owner-occupiers. The timing to secure this parcel couldn’t be more opportune,” Burns said.

“The balance of 2-6 Southampton Crescent can be occupied or refurbished and leased at rents that will be attractive to a growing contingent of office users seeking affordable, city fringe accommodation. The demand for this type of accommodation is expected to strongly rebound as cost-conscious tenants seek accommodation with flexible floor plates.

“Abbotsford is one of Melbourne’s last city fringe suburbs with genuine unrealised development potential. The neighbouring Richmond and Cremorne markets have become ultra-competitive and Abbotsford is becoming highly-sought after by the large number of businesses looking for city fringe accommodation close to quality lifestyle amenity. This property offers a rare ready-to-go office development opportunity.”

Hengyi Group General Manager Simon Manley said, “We are taking advantage of the lack in permitted sites by sending Southampton Crescent to market”.

“The last year has been about design and reshaping the envelope to maximise the relationship between the former Kodak building and something new and edgy. The ethos around the permit is allowing someone to develop individually or together as a singular holding, allowing flexibility for keeping tenants on foot at the front and to develop the back.”

“The Abbotsford precinct is changing, and this building and permit will be a keystone to the heritage and the future of Abbotsford and the CUB area.”

Burns said Abbotsford is rapidly gentrifying from an industrial precinct to a sought-after medium and high-density residential and commercial destination.

“The gentrification of Abbotsford has been recognised by experienced and quality developers such as Hamilton Marino, Forza Capital, Medley Group, and Banco Group, who all have office developments planned or underway in the vicinity,” he said, adding that developers such as Salta, Hamton and Icon have all recently completed residential projects in the suburb.

The purchaser will also have the opportunity to renew short or medium-term leases for the 36 Bond Street and 27-29 Duke Street warehouses and asses their options for the entire property, Burns noted.

Fitzroys recently sold the iconic “Skipping Girl” building at 651 Victoria Street in Abbotsford to a private purchaser with plans to upgrade and re-let the building with a longer-term view to redevelopment, which may include adding levels to the existing building or construction of a new building.

Developer Buys Xavier’s Brighton Campus for $100m
Developer Golden Age has bought the Brighton campus of Xavier College’s junior school for $100 million.

The campus, known as Kostka Hall, was opened in 1937 and closed last year. Xavier’s other junior school, Burke Hall, and its senior campus are in Kew.

The 3.3ha Kostka Hall site is on South Road and comprises the historic Maritima residence, school buildings, and sports fields.

Late in 2020, Golden Age bought a 5ha Box Hill South site occupied by an international school.

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.