Weekly Wrap

Fitzroys Weekly Wrap - 2nd December 2022

Posted on 02nd December 2022

259 Hyde Street, Yarraville
A local investor bought the 512sqm strata-titled office and warehouse with 6 parking spaces for $1.83 million, on a 4.5% yield. Campos Coffee, winner of Champion Australian Roaster 2021 and 2022, and a subsidiary of listed global giant JDE Peet’s, has a 5 5 5-year lease from July 2021 returning $82,400pa plus outgoings and GST

2B Dunmore Drive, Truganina

International freight forwarding company Success Logistics acquired the 5,061sqm office and warehouse for $13.5 million.

2-4 Duke Street, Abbotsford

A landbanking developer paid more than $4 million for the 713sqm corner site, which is zoned Industrial 1 and is leased on a monthly agreement to Abbotsford Collision Centre.

Unit 8, 23-25 Clarice Road, Box Hill

Dandenong-based kitchen manufacturer Reno Work signed a 3-year lease at $45,000pa for the 215sqm office and warehouse, which it plans to use as a display area and head office.

12 Flight Drive, Tullamarine

A décor business specialising in Christmas decorations leased the 1,065sqm office and warehouse for $140,000pa, or $131/sqm.

2/40 Metrolink Circuit, Campbellfield

A structural steel company leased the 1,500sqm office and warehouse for $165,000pa, at $110/sqm.

27 Windsor Place, Melbourne
The 3-level building in the CBD’s east end sold for $5.625 million. Offered with vacant possession, it has 287sqm of floor area and is on a 123sqm site.

Suite 2, 544 Mitcham Road, Mitcham

A local investor bought the 65sqm first floor office suite for $323,000 on a 5.58% yield, returning $18,054pa plus outgoings and GST.

326 William Street, Melbourne
An investor bought the 390sqm ground floor shop leased to Chemist Warehouse for $3.62 million, on a 5.3% yield. It is at the base of a 35-storey residential and serviced apartments tower, opposite Flagstaff Gardens and Flagstaff train station.

91 Burwood Road, Hawthorn

An investor bought the 257sqm shop and dwelling occupied by Melbourne Pool & Spa Services for $1.64 million. Current rental return is $66,298pa plus GST.

Shop 3, 495-511 Burwood Highway, Vermont South

The 181sqm shop within Vermont South Shopping Centre sold for $1.245 million on a 4.8% yield. The longstanding tenant of 25 years, Good Cents Arty Party, has a new 3+3+3-year lease returning $60,000pa plus outgoings and GST.

4 Andrew Street, Mount Waverley

The 70sqm building occupied by Giva Hair & Beauty sold for $832,000, on a 2.2% yield.

97 Upper Heidelberg Road, Ivanhoe

National beauty group Body Catalyst leased the 76sqm building for 5 years at almost $600/sqm.

14 Paisley Street, Footscray

A hairdressing salon leased the 100sqm ground floor shop for 3 years at $36,000pa.

5 Playne Street, Frankston
A local residential developer bought the 1,738sqm, Commercial 1-zoned site for $4.275 million. It was offered with a permit for a 9-level office project of nearly 13,000sqm. Next door is Bayside Shopping Centre, where owner Vicinity Centres has gained approval for a $120 million, 8-level office building.

$52m for City Fringe Office Building
Local investment manager Bayley Stuart Capital has added to its Melbourne city fringe portfolio with the $51.785 million acquisition of an East Melbourne office block.

Located on the south side of the Fitzroy Gardens and next to the Jolimont rail yards, the 5-level building has a lettable area of 5,526sqm that is about 80% occupied and anchored by Arthur J Gallagher & Co.

Bayley Stuart also owns 2 office buildings in Cremorne, each acquired for $50 million. They are the fully-leased 600 Church Street, where Domain has its offices, and the 1-11 Gordon Street building that was acquired off-the-plan in 2019 without a lease being signed, and is now occupied by the Paul Ramsey Foundation, Roger Federer’s footwear brand On Running, and liquor manufacturer Pernod Ricard.

Bayley Stuart also entered into an $86 million fund-through deal with CHT Architects and builders Hamilton Marino to acquire a 10,000 sqm office block they had developed in Abbotsford.

OSK Adds to Southbank Holdings
Malaysian developer OSK Property has bought a 1,597sqm Southbank site for $27.25 million.

The 190 City Road property was sold by Hexa Group, which paid $18.5 million 2 years ago and drew up plans designed by Rothelowman Architects for 40-storey residential tower with 308 apartments, but did not submit them to Melbourne City Council.

The site is improved by a 3-storey office building, and is near the Australia 108 tower, the Eureka tower, Crown Casino, and Beulah’s residential, office, hotel and retail dual-tower project that will rise to be the tallest structure in Australia.

Just a block away, OSK is currently developing the $2.8 billion Melbourne Square precinct on Kavanagh Street. The developer has completed the 1st 2 buildings that include a Woolworths-anchored retail centre, and upon completion in 2027, the entire project will comprise 2,600 apartments, a 687-key hotel and 37,000sqm of office space.

Prime Puckle Street Freehold Sold Under the Hammer
Puckle Street’s ongoing strong performance and its place at the seat of the generational Moonee Ponds development boom continue to attract investors from Melbourne and around Australia.
Fitzroys’ Chris Kombi and Ervin Niyaz sold 93 Puckle Street under the hammer for $2.125 million, on a sharp 3.7% net yield, on behalf of a private investor.

A private local buyer was the purchaser, 1 of 4 bidders at the auction following strong enquiry during the campaign that included local and interstate investors.

The high-profile 2-level 180sqm building is positioned on a 160sqm site in the core of Puckle Street. It comprises a ground level Japanese restaurant with dining area, commercial kitchen and storage leading to an expansive 4-bedroom dwelling with bathroom on level 1. Popular eatery Mizu Sushi has a renewed 5 5-year lease.

“Investors were looking to get into what is a traditionally strong retail strip with excellent trading prospects due to the ongoing completion of a number of new buildings surrounding Puckle Street,” Niyaz said.

According to Fitzroys’ new Walk the Strip report, Puckle Street vacancies came down from 4.6% to 3.2% in 2022, among the lowest of Melbourne’s iconic shopping strips. It will be further supported by ongoing developments such as Penny Lane that will bring apartments, retail, hospitality and a Palace Cinema to the strip, and the future $2 billion commercial and residential overhaul of the Moonee Valley Racecourse nearby.

“This was also a rare chance to invest in what is fast-becoming the lifestyle hub of Melbourne’s north-west with a proven track record for capital growth,” Niyaz said.
Puckle Street anchors the Moonee Ponds retail and lifestyle precinct that includes a Woolworths supermarket, Moonee Ponds Central, and a number of local and national eateries and service retailers.

Kombi said, “Despite the rising interest rates, we’re continuing to see a good depth of enquiry, strong results and tight yields in this part of the market,” Kombi said.

“Investors are keen to secure a steady cash flow from retail and commercial properties with quality tenants on long leases.”

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.