The Surf Coast’s best commercial property offered in years - a fully-leased, fully-refurbished mixed-use complex home to sports and lifestyle giant Boardriders, Inc. - has sold for more than $40 million as the Surf Coast region experiences a surge in growth and popularity.
Fitzroys Director Paul Burns negotiated the $40.06 million off-market sale of 27 Baines Crescent in Torquay between boutique fund manager IP Generation and a local private investor.
The local private investor, with offshore origins, acquired the property on a 5.59% yield. Burns said the property sold off-market but numerous bids were received, resulting in a competitive, private Expressions of Interest process.
“This is an outstanding, long-term investment however it also has significant value-add upside via the potential development of an additional building on the site,” Burns said.
IP Generation originally purchased the property in 2019 from Boardriders – the parent company of internationally renowned brands Quiksilver and Billabong – and has transformed the property from the Boardriders’ head office into a mixed-use multi-tenant development.
The existing 6,096sqm building is also occupied by Sou’west Brewery, flexible workspace provider Surf Coast Social, State Government-funded entity GORCAPA (Great Ocean Road Coast & Parks Authority), a new entity - The Bathhouse, who will collaborate with experienced beauty operator Little Company, and pilates and yoga fitness studio Core Plus. The property has a very long Weighted Average Lease Expiry (WALE) of 12 years.
It is on a substantial 19,550sqm site that has parking for 202 cars, and has huge future potential.
“Torquay has a tightly confined commercial precinct which is experiencing unprecedented demand from the influx of ‘sea changers’ in response to COVID and flexible working arrangements,” Burns said. The Surf Coast is the seventh-fastest growing LGA in Australia, according to the 2021 Census. The recently adopted Torquay-Jan Juc Retail and Employment Land Strategy forecasts the current circa 22,000 population of the Torquay-Jan Juc area to surge by a further 12,000-plus residents by 2036.
“Torquay is the largest settlement in the Surf Coast region, and Commercial zoned land is almost fully occupied. The purchaser recognised the excellent long-term rental prospects and potential of the site, and the ultra-rare opportunity to gain a foothold in one of Australia’s fastest-growing regions.”
“This was reflected in the momentum built up during the off-market campaign. This transformative period for the Surf Coast will continue to have a profound effect on commercial property market demand.”
IP Generation Chief Executive Chris Lock said the sale reflected the quality of the building, resulting from considerable capital investment, as well as growth in demand for high-grade commercial property in the Surf Coast region.
“We identified value-add opportunities at 27 Baines Cresent, consistent with our investment strategy, and are very pleased with the outcome of the sale,” Lock said.
As part of the Torquay-Jan Juc Retail and Employment Land Strategy, Baines Crescent is to be rezoned from its current zoning - Industrial 3, to Commercial, the process expected to take less than 12 months.
The 1.9-hectare site at 27 Baines Crescent has a building footprint of just 4,000sqm, and the impending rezoning will promote more uses and greater density and height which will open the possibility for further development of the site.
“This property is expected to be one of the preferred sites for any new major tenants seeking accommodation in Torquay,” Burns said.
“An indicative scheme for an additional building on the site has been prepared, the dearth of alternative sites and this properties location make it a prime target for new tenants.”
“Torquay essentially has no meaningful vacancy, the property owner has received approaches from a variety of tenants seeking space, including typical office users.”