Weekly Wrap

Fitzroys Weekly Wrap - 16th December 2022

Posted on 16th December 2022

6 Smith Street, Collingwood
A private local self-managed super fund investor paid $1.935 million for the double-storey 215sqm building on a 200sqm site. It has a 2-year lease to Fertile Ground Health Group.

150-158 Montague Street, South Melbourne

The 767sqm showroom, zoned Capital City 1, sold for $5 million on a circa 4.5% yield. Ducati has a 5-year lease from the beginning of this year returning around $250,000pa.

322-324 Charman Road, Cheltenham

The fully-leased 650sqm building anchored by Charman Road Pharmacy sold for $3.5 million, on a 4.8% yield.

20 Ryley Street, Wangaratta

An investor bought the Hungry Jack’s-tenanted 350sqm building, on a 1,815sqm site, for $3.16 million, on a 3.85% yield. It has a 5-year lease to 2027 with no option.

89 Grimshaw Street, Greensborough

The 230sqm building leased to TAB sold for $2.005 million. The ASX-listed tenant has a new lease plus options to 2030 that returns $115,000pa net plus GST.

2 Hartnett Drive, Seaford

The 357sqm building purpose-built for Westpac Bank and home to the major lender for more than 30 years has sold for $1.875 million, and will be fitted out as a medical centre.

105 Bay Street, Port Melbourne

An investor bought the 68sqm vacant shop for $890,000.

137 Church Street, Richmond
The recently refurbished 764sqm former warehouse, on a 560sqm Commercial 1-zoned corner site, sold for $5.575 million to an owner-occupier.

Shop 1/4 Pacific Promenade, Pakenham

The 80sqm space sold for $665,000. ASX-listed diagnostic and day care provider Healius has a 5+5+5-year lease returning $34,371pa plus GST.

20-50 Waterview Close, Dandenong South
Fund manager Centennial paid $19.8 million for the 9,304sqm warehouse on a 17,480sqm site. It has a 3-year leaseback deal to Apack, which supplies goods to flower and plants retailers.

4, 19-23 Geddes Street, Mulgrave

An investor bought the 850sqm office, warehouse and showroom occupied by Heidelberg Graphic Equipment for $3.1 million, on a 5% yield.

150-168 Atlantic Drive, Keysborough

Global paper and packaging supplier Spicers leased the 16,065sqm warehouse, on a 27,272sqm site owned by Frasers, at more than $1.5 million pa.

71-73 Link Drive, Campbellfield

Retreat Caravans increased its footprint to more than 4,000sqm on Link Drive with the new lease, at a building rate of $109/sqm.

147 O’Herns Road, Epping

Portelli Tiles leased the recently completed 910sqm building at $165/sqm. It is owned by M.I

107-111 Railway Avenue, Laverton
A local developer paid $1.46 million for the 1,205sqm site, which is zoned General Residential 1.

28 Thomas Street, Moonee Ponds
An investor paid $6.455 million for the 1,928sqm childcare centre site adjoining the Moonee Valley Racecourse precinct. The sale price reflected a circa 5% yield, with the property leased to Busy Bees on a 20+10+10-year term returning $325,576pa plus GST.

Shop 1/1312 Malvern Road, Malvern

The 140sqm cosmetic clinic building sold for $1.020 million. Cosmetic Avenue has a 5-year lease to 2024 with an option to 2029 the brings $55,726pa plus GST.

Strong Yarraville Office/Warehouse Sale a Strong Signal to the Market
The strong sale of an office warehouse in Melbourne’s inner west - home to Australia’s back-to-back champion coffee roaster - is a welcome signal to the market that investors are still active and campaigns continue to be competitive, despite the rising interest rate environment.

Fitzroys’ Marco Sandrin, Brent Glassford and Ervin Niyaz sold 259 Hyde Street, Yarraville for $1.83 million under the hammer after bidding between multiple parties.

Patrick O’Callaghan of O&Co was the transaction manager.

Zoned Industrial 3, the 512sqm building comprises a clearspan warehouse with 2 container height roller doors, corporate office and breakaway area, with on-site parking spaces.

It is leased to Campos Coffee, winner of the Australian International Coffee Awards’ Champion Australian Roaster in both 2021 and 2022, and a subsidiary of listed global coffee giant JDE Peet’s. The secure 5+5+5-year lease includes fixed annual rent reviews and currently returns $82,400pa plus outgoings and GST. “This was a strong result for a strata office and warehouse, with the sale price reflecting a tight circa 4.5% yield,” Glassford said.

“The result is a great signal to the market that there remains good demand despite the Reserve Bank’s consecutive interest rate rises. Buyers are still chasing securely-leased properties that bring a reliable cashflow at a time of sharemarket and residential market volatility, and we’re seeing competitive campaigns, strong results and tight yields.”

Sandrin said there remains a very low supply of quality investment stock available in this part of the market.

“The industrial sector has attracted a huge number of investors at this price point over the past 3 years. Properties invariably attract a depth of interest and are snapped up quickly,” he said.

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.