Weekly Wrap

Fitzroys Weekly Wrap - 3rd March 2023

Posted on 03rd March 2023

240 Camberwell Road, Camberwell
Australia Post divested the retail complex for $6.01 million, which traded on a 4% yield. The 504sqm complex is on a 619sqm site on Camberwell Junction, and returns $260,813pa plus outgoings and GST from Sight & Sound Galleria, on a lease with options to 2031.

1/121 Grices Road, Clyde North

The 89sqm corner premises sold for $1.097 million, on a 5.52% yield. Burga Playa has a new 10-year lease plus options returning $60,600pa plus GST.

5/121 Grices Road, Clyde North

An investor paid $983,000 on a 5.6% yield for the brand-new shop, which has a 7-year lease plus options to growing chain Victoria’s Pizza ‘N’ Beyond that returns $55,000pa net plus GST.

393 Camberwell Road, Camberwell

A local Boroondara couple paid $975,000 on a 4.02% yield for the newly renovated 87sqm building. It is leased on a 5-year term with options to café Thirty Mill, returning $40,170pa net.

194 Warrigal Road, Oakleigh

A local investor bought the vacant 260sqm building for $750,000.

516-524 Bridge Road, Richmond

Trek Bicycles signed a 7-year lease with an option for the 378sqm space at $322/sqm net plus outgoings and GST.

Level 5, 414 Lonsdale Street, Melbourne
A professional services firm bought the 154sqm strata office for $1.53 million.

Level 1, 1062 High Street, Armadale

Fashion boutique Grace has leased the level 1 space to use as its offices after recently opening its flagship store across the road at number 1065. Rents for these types of offices along High Street typically attract $300-$350/sqm.

21-27 Railway Place, Preston

Seven Hats Psychology leased the 2-level, 230sqm office, owned by St John’s College, for 5 years at $55,000pa.

2 Delivery Drive, Truganina
Shoe and leather-care product manufacturer Waproo paid $4.88 million for the 4,800sqm site, which will be home to its new storage and distribution centre.

433 Graham Street, Port Melbourne

The partly demolished 290sqm warehouse shell on a 414sqm site sold for $2.075 million to an investor who plans to refurbish and lease out the property.

1-4/228-234 High Street, Shepparton

The fully-leased 780sqm showroom building with 4 tenancies on 4 titles, on a 1,279sqm triple-fronted site, sold for $1.8 million on a 5.94% yield. Occupants include a NDIS services provider, Hotondo Homes, sports recovery centre and martial arts school for total rent of $106,853pa plus GST.

31 Catalina Drive, Tullamarine

The 420sqm warehouse sold for $1.4 million, on a 3.6% yield. It has a 2+2-year lease returning $43,890pa net.

935 Taylors Road, Dandenong South

The federal government committed to a long-term lease over a 5,582 sqm office and warehouse, and will pay $731,242pa.

10 Melrose Court, Boronia
The 3,452sqm site sold for $1.86 million. Currently improved by a 5-bedroom home, the property has an existing permit for a 5-lot subdivision with a mix of 3 and 4-bedroom dwellings.

309-311 Nepean Highway, Brighton East
An existing childcare provider leased the 480sqm facility, with approval for 74 long day-care places, for 15 years at $215,000pa.

Secure Metropolitan ALDI Supermarket Investment Hits the Market
Melbourne’s metropolitan retail property investment market is set for an early test in 2023 with an ALDI supermarket offered for sale.

Fitzroys’ Chris Kombi, Ervin Niyaz and Ben Liu are marketing the ALDI Supermarket property at 8-34 Gladstone Park Drive, Gladstone park via Expressions of Interest closing Thursday 23rd March.

Price expectations are of $5 million-plus.

Located within the high-performing Gladstone Park Shopping Centre, the expansive 1,604sqm property is being offered with a secure 10-year lease plus options to global supermarket giant ALDI.

“We’re expecting strong investor interest in this rare opportunity given its price point, strong return and rental growth prospects, and secure lease to one of the world’s largest and most profitable supermarket chains,” Kombi said.

“The lease terms offer excellent potential for future rental growth.”

He added, “The high-inflation environment should be short-lived and assets purchased now on strong returns will prove to be very prudent investments”.

The property is strategically positioned opposite Woolworths supermarket and BWS and is surrounded by over 100 national and local traders, and there is outstanding parking availability with 1,100 on-site centre car parks

Niyaz said the ALDI supermarket has traded well given its location in a densely-populated residential and commercial catchment with further growth prospects. Gladstone Park Shopping Centre is centrally positioned within the established middle-ring suburb of Gladstone Park, located about 15 kilometres north west of Melbourne’s CBD, and is well supported by a sprawling local catchment with high patronage numbers.

“The City of Hume is one of the fastest-growing municipalities in Australia, with almost 250,000 residents and with projections of further significant population growth over the
next 15 years,” Niyaz said. Research firm forecast.id expects the City of Hume’s population to grow to almost 395,000 by 2041.

The property offers convenient access to major arterials including Mickleham Road, Metropolitan Ring Road/Western Ring Road and Tullamarine Freeway and City Link. It is only 3 kilometres from Melbourne Airport.

Hospitality Tenants Still Sweet on Glenferrie Road, Hawthorn
Food and beverage tenants continue to flock to Glenferrie Road, Hawthorn, as the sector continues to drive retail leasing across Melbourne’s famous shopping strips.

Fitzroys’ Tom Fisher has just negotiated leases to global health food purveyors Oakberry Açai at 694 Glenferrie Road, and cakes and cupcakes specialists Drop By Sweet at 636 Glenferrie Road.

The proportion of food and beverage tenancies on Glenferrie Road, Hawthorn has lifted to a long-term high of 44.2%, according to Fitzroys’ Walk The Strip report, consistent with the trend detailed in the report that showed the average vacancy along Melbourne’s iconic shopping strips came down in line with an increase in hospitality operators taking up spaces.

According to Walk The Strip, Glenferrie Road, Hawthorn’s vacancy came down from 12.8% over the past year to 7.9%, marking one of the biggest falls in vacancy across Melbourne’s shopping strips.

Oakberry Açai will be moving to a prominent corner in the prime section of Glenferrie Road, Hawthorn, which Fisher said is becoming one of the most popular food and hospitality precincts in Melbourne.

The long 7-year deal was struck at $70,000pa plus outgoings and GST, on a rate of $1,555/sqm.

“Oakberry Açai liked the prominent corner in the heart of Hawthorn,” Fisher said.
Drop By Sweet leased 636 Glenferrie Road at $37,000 per annum plus outgoings and GST, or $1,057 per sqm.

“The tenant was attracted to the high exposure near Glenferrie and Burwood Roads, at the intersection of the suburb’s main retail strip and its fast-growing office market, and particularly close to Swinburne University,” Fisher said.

“Smaller and fitted-out spaces allow operators to open up quickly and in this case establish a bricks-and-mortar presence, without having to commit to fit-out costs and higher rents for larger spaces.”

Vacancies have returned to pre-COVID levels along Glenferrie Road, Hawthorn, helped by the return of Swinburne University students and the increasing number of office workers that have boosted the affluent catchment, Fisher said.

The shift in vacancy numbers along Glenferrie Road, Hawthorn and the increase in food and beverage tenants can be largely attributed to the number of deals struck by Fitzroys along the strip in recent times. They include leases to The Cookie Box, within the Lido Cinemas complex, 99 Pancakes at 642 Glenferrie Road, Saul’s Sandwiches and Plaka Gyros within 673 Glenferrie Road, Master Roll Vietnam at 696 Glenferrie Road, and most recently Sushi Uokin at number 639.

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 2023 Fitzroys.