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, 36 Bond Street and 27-29 Duke Street, Abbotsford in one line via an international Expressions of Interest campaign closing 3pm, Friday, 5 August.
Expectations are in the early to mid-$20 millions 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, nine-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 five-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.