Weekly Wrap

Fitzroys Weekly Wrap - 24th June 2022

Posted on 24th June 2022

000 Retail 05


72-74 Chapel Street, Windsor

Offered for the first time in more than 100 years, the 614sqm 2-level double-fronted building on a 332sqm site sold for $4.055 million, on a 3.67% yield. Klapp Audio Visual has a 5-year lease from September 2020 returning $149,350pa.

68 The Terrace, Ocean Grove

The 2-level 373sqm building leased to RT Edgar Bellarine and Ocean Grove Cellars sold for $3.8 million, on a 3.27% yield. It returns $124,473pa net and is on a 606sqm site zoned Commercial 1, with demolition clauses in both leases.

138 Main Street & 58 McLaren Place, Mornington

The 2 shops on 1 title, leased to Assembly Label and Wickety Wax, sold for $3 million. The property returns $86,190pa net.

66 Newquay Promenade, Docklands

A local investor based overseas bought the 280sqm waterfront property for $2.15 million, on a 5.35% yield. Longstanding tenant Steakhouse Grill 66 has a recently renewed 5-year lease plus options returning $130,000pa plus GST.

209-211 Bay Street, Brighton

An owner-occupier paid $1.3 million for the 109sqm cold shell, on the ground floor of BPM’s 5-level, 110-aparment The Standard Brighton development.

8/335 Harvest Home Road, Epping

The 100sqm shop leased to Ferguson Plarre Bakehouse sold for $1.26 million, on a 4.29% yield. It has a new 7-year lease plus options to 2039 returning $54,000pa net plus GST.

100 Exhibition Street, Melbourne

ANZ is moving into the 200sqm former NAB branch space on a 5-year term at around $400,000pa. NAB moved to 24 Collins Street.

000 Offices 05

Suite 2, 44 Warra Street, Kooyong
Shoe designer Marcus B is relocating to the 70sqm space, on a 2-year lease at around $270/sqm.

Suite 7 & 8, 1409 Burke Road, Kew East

Tax Owl leased the 50sqm space at $300/sqm.

000Industrial 05

29-31 Lionel Road, Mount Waverley
The vacant 2,400sqm office and warehouse on a 3,431sqm site sold for more than $7 million. It has 36 on-site parking spaces.

88-90 Malcolm Road, Braeside

An investor paid $3.04 million for the 2-level 1,150sqm office and warehouse on a 1,736sqm Industrial 1-zoned corner site with a combined 83m of frontage. It sold with short-term income on a 2.2% yield.

1/44 Rushdale Street, Knoxfield

A neighbour bought the 697sqm for $1.63 million for their growing business.

218-220 Hammond Road, Dandenong South

Med-X Health Care Solutions leased the 1,788sqm office and warehouse on a 3,102sqm site with 31 parking spaces at $125/sqm. The property had recently been purchased vacant by an investor.

000 Development 05

19-21 Pratt Street, Ringwood
A large investment company bought the 1,621sqm site for $5.75 million.

45 Longford Road, Epping

The vacant 2,109sqm lot sold for $2.475 million. It is approved for 2 side-by-side warehouses of 757sqm each.

000 Specialised 05

292-296 Princes Highway, Corio Bay
The freehold of the 25-room Corio Bay Motel sold for $3.1 million. It is on a 2,323sqm site and has a 5-year lease from 2018 with options, returning $160,000pa plus outgoings and GST.

177 Bonnyvale Road, Ocean Grove

Sydney-based Hampshire Property Group, which focuses on developing independent living communities for people aged over 50, bought the 30ha site home to the Collendina Caravan Park for around $34.5 million. About 80% of the site is undeveloped.

000 Talking Points 05

Activity Returns to the Melbourne CBD, and So Does Retail Leasing
Activity is returning to the Melbourne CBD and retail leasing activity is tracking its path, with Fitzroys completing multiple deals this month.

Fitzroys’ James Lockwood, Franklin Gikas and Travis Keenan have just negotiated leases at Shop 3, 237-239 Flinders Lane, 10 Howey Place and 347A Little Collins Street.

On Flinders Lane, Bent-Oh! will open its 2nd Melbourne store, following its successful first location in South Yarra that opened 3 years ago. It committed to a long 5+5-year deal at $40,000pa.

The new CBD outlet will have a similar focus specialising in bento boxes, highlighting fresh and quality ingredients coupled with fast service, with an emphasis on targeting time- conscious CBD office workers on their break. The parent company also operates specialty coffee and sandwich bar Bad Eggs in South Yarra, and has been running specialty coffee and salad bar Café Augusta in St Collins Lane.

Union Kiosk - one of Melbourne’s smallest and most sustainable cafés - is upsizing to 10 Howey Place after outgrowing their current CBD location. The 3+5-year lease was struck at $35,000pa. Union Kiosk serves 100% vegan jaffles, coffee and sweets, and operates efficiently with zero waste through reuse, recycling and composting.

“Union Kiosk has been operating in The Causeway for the past 5 years and has stayed operational throughout COVID lockdowns,” Gikas said. “Having survived the period with a strong performance, owners Rogan and Tatum thought it was time to move into a bigger location, while still being located off the beaten track, reflecting the success they’ve enjoyed in this part of the CBD.

“CBD laneway offerings remain a quintessentially ‘Melbourne’ experience.”

On Little Collins Street, Sulwha Desert Bar will open a permanent offering on a 5+2-year lease at $68,500pa. It had successfully operated a pop-up concept in Little Bourke Street between 2020 and 2021 and having built a strong customer following, the team thought it was a great opportunity to find a location to set up shop for the long-term. Sulhwa specialises in Asian-style deserts and in particular milk ice-flakes and cakes.

“Located close to the corner of Elizabeth Street and Little Collins, the high foot-traffic and lack of desert offering in the area were main drivers for the pop-up locking in a long-term location here,” Keenan said.

Lockwood said it is telling that all of the operators have had immediate experience in the
CBD.

“We’re again seeing businesses prepared to make bigger commitments. The lease terms show tenants are confident in the CBD and are in it for the long haul,” he said.

“The CBD is slowly coming back to life. There is confidence in the uptick of day-to-day trade with foot traffic throughout the week and office occupancy both on the way up, and overall tenant enquiry and confidence in recent weeks is growing in line with that.”

City of Melbourne pedestrian traffic data shows night-time activity is up across the CBD’s dining precincts, and weekend visitation throughout the Grand Prix, Comedy Festival and over the early part of the footy season was recorded at higher than pre-pandemic levels.

Lockwood said properties that have existing an fit-out and are in the 50 to 100sqm range are currently the most desirable in the CBD retail leasing market.

“Hospitality operators have dominated retail leasing enquiry over the past 2 years. Food and beverage businesses were able to keep trading while the pandemic presented opportunities for businesses to enter the CBD market that previously wouldn’t have considered it, with an eye to a future rebound in activity.

“We’ve seen a big influx of interstate and outer-suburb operators looking to make a mark in the CBD.”

All 3 annual lease rates were inclusive of outgoings.

New Chapter for Historic Collins Street Building
A historic Collins Street building in the “Paris end” of Melbourne’s CBD is set for a new chapter.

Wilkinson Publishing will occupy 206sqm across levels 6 and 7 of 174 Collins Street on a long 6+6-year term negotiated by Fitzroys’ Hamish Dennis and Stephen Land at $70,000 per annum, or $340 per sqm.

Dennis and Land negotiated the lease on behalf of the Baptist Union of Victoria.

“Wilkinson Publishing has a passion for heritage buildings in Melbourne - particularly in the Paris end of town - and loved the rich history associated with 174 Collins,” Dennis said.

The space is within the boutique 8-level building Central House, adjoining the circa-1862 Collins Street Baptist Church designed by Joseph Reed, who also designed the Melbourne Town Hall. The first chapel was built on the site in 1845, 7 years after the first Baptist service in Melbourne was held on a vacant site opposite that is now home to the Regent Theatre. The current church was built on 174 Collins Street in 1862.

Wilkinson Publishing will remain in the Paris end of the CBD, moving from their current premises at Alcaston House at 2 Collins Street.

Dennis said there was particular interest from media and digital companies.

“Many tenants are looking for space from circa 150sqm to 300sqm, particularly space that is fully-fitted or has a brand-new spec fit-out. Tenants are looking to plug and play.

“The sub-500sqm market overall has been particularly active. Businesses with smaller space requirements have proven to be more agile and more willing to make commitments to leases, and now we’re seeing tenants wanting to commit to longer-term leases after assessing their requirements during COVID.

“Smaller offices are conducive to a smaller capital outlay at a time in which not all staff are expected to be in the office at all times.”

Police Association Headquarters Sells for $22m
Elizabeth Ring has bought the East Melbourne heritage red brick building formerly owned by the Police Association Victoria for more than $22 million.

The 115-year-old building known as St Hilda’s is on the 2,024sqm site at 1 Clarendon Street, next to Fitzroy Gardens, and has been the Association’s headquarters for the past 21 years. The Association will be moving out in 2023.

Throughout its history, the building has been the Church of England Missionary Training Home for women missionaries, then the Church of England Deaconess House in the 1930s, used for apartments, and the offices of architects Bates Smart.


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.