Weekly Wrap

Fitzroys Weekly Wrap - 11th November 2022

Posted on 11th November 2022

211-213 High Street, Thomastown
A Melbourne-based buyer keen on the strong northern corridor bought the 515sqm fully-leased building, occupied by tenants including Telstra and Australia Post, for $2.35 million. It is on a 604sqm site zoned Commercial 1 and returns $117,458pa plus GST.

66-70 Wells Street, Frankston

The fully-leased multi-tenanted 805sqm building on a 765sqm Commercial 1-zoned site sold for $3.8 million. Tenants include Gami Chicken and Beer and Bank of Queensland, for a combined return of $215,218pa plus GST.

3 Zoe Drive, Epping

An investor bought the 174sqm showroom for $910,000 on a 5.8% yield. 9Round Boxing has a new 7+6-year lease and pays $52,800pa plus GST in rent.

46 Wyndham Street, Shepparton

The 237sqm medical clinic on a 539sqm site sold for $780,000 on a 5% yield. It has been occupied for the past 16 years by Nixon Street Medical Centre, which has 27 clinics across Victoria and NSW, and currently has a 3+3-year lease returning $38,971pa net plus GST.

165 Bay Street, Port Melbourne

A buyer intending to renovate bought the 145sqm building, leased to laundromat The Washing Line, for $1.57 million on a 2.9% yield.

10-12 York Street, South Melbourne
Offered with vacant possession, the 372sqm building with 6 parking spaces sold for $3.9 million.

4 Yarra Street, South Melbourne

St. Ali sold its South Melbourne headquarters to an owner-occupier for $2.045 million. The 2-level 196sqm building is on a 114sqm site zoned Commercial 2 and has been home to the coffee roasters for the past 7 years.

4-6 Croydon Road, Croydon

The newly developed 72sqm vacant office sold for $505,000 to a local owner-occupier.

405-409 Ferntree Gully Road, Ferntree Gully

A local owner-occupier bought the 4,044sqm office and warehouse on a 5,961sqm site for $12.825 million. Cabrini Health has a lease over the property until December 2023 returning circa $350,000pa.

11 Riverside Avenue, Werribee

A local owner-occupier in the automotive trade paid $1.65 million for the 1,459sqm site, which has 2 interconnected warehouses totalling 694sqm.

Unit 4, 636 Whitehorse Road, Mitcham

Due for completion in December, the 291sqm office and warehouse unit sold for $1.55 million.

60 Annandale Road, Tullamarine

A 3rd-party logistics and transport operator leased the 5,290sqm warehouse at $100/sqm, or $529,000pa.

56-60 McClure Street, Thornbury

A panel-beating business on the move due to land acquisitions for the North East Link project leased the 911sqm warehouse on a 3+4-year deal at $110,000.

78-86 Dudley Street, West Melbourne
The home of theatre restaurant Witches in Britches sold for $7.288 million to a buyer with plans to redevelop the site in the medium-term. Witches in Britches has a 5-year option to lease the 1,050sqm 2-level building, which is on a 742sqm Mixed-Use site, returning $245,203pa.

213 Canterbury Road, Blackburn
A local investor bought the 207sqm building on 680sqm of land for $1.632 million on a 4.6% yield. It has a new 3+3+3-year lease to Blackburn Allied Health Group returning $75,212pa.

120-122 Cumberland Road, Pascoe Vale

Guardian Childcare and Education leased the 1,623sqm site on a 15+10+10-year term at $547,200. It will be the company’s 2nd childcare centre in the suburb.

$40m Torquay Sale Amid Surf Coast Surge
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 7th-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 1.9ha 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.”

Brunswick’s Prized Value-Add Opportunity Sells for $4.85m
An incredibly rare large-scale inner-city landholding just 100m from Lygon Street in highly sought-after Brunswick has sold for $4.85 million.

Fitzroys’ Brent Glassford, Marco Sandrin and Mark Talbot sold 160-164A Victoria Street on behalf of the Israel-based Priwler family, who built the warehouses on the site in the 1960s.

The sale price reflected an ultra-sharp 1.95% yield.

The significant 2,679sqm site is uniquely hybrid-zoned, being partly zoned Neighbourhood Residential 1 and Industrial 3. It comprises 5 independent warehouses totalling 1,921sqm of building area with central road access.

The property was offered fully leased to a variety of established tenants with highly flexible lease profiles.

“We received interest from developers, value-add players, land bankers and owner occupiers. Investors were particularly prominent in the enquiry, keen to landbank the site given the leases in place.

“The purchaser is a passive investor who will landbank the site for many years to come. Large-scale landholdings in Melbourne’s inner north are particularly rare to find at the moment, especially those so close to a busy lifestyle and hospitality strip,” Talbot said.

“This particular part of Lygon Street is going through a major transition, emerging as a major contributor to the renowned hospitality and lifestyle offering of Melbourne’s inner-north in its own right.

“The purchaser can enjoy a consistent cash flow while assessing their options for the site, as Lygon Street and the surrounding area continues on its growth trajectory.”

Multiple medium and high-density developments on and around Lygon Street have boosted the immediate catchment of the strip, enhancing day-to-day trade and the nightlife, supporting a high-quality mix of restaurants, eateries and bars.

“Brunswick continues to generate strong demand from investors and developers. Well-located and well-connected inner-suburban locations close to quality lifestyle amenity have become overwhelmingly popular, particularly at a time of flexible working arrangements,” Talbot said.

The property is just moments to the Route 1 and 6 tram routes, and is also just 750m from the Sydney Road lifestyle and hospitality strip - the longest in the southern hemisphere.

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.