Weekly Wrap

Fitzroys Weekly Wrap - 31st March 2023

Posted on 31st March 2023

43 Hall Street, Moonee Ponds
An investor paid $2.95 million on a 3.7% yield for the 320sqm building, which is fully leased to 2 retail and 2 office tenants, and is on a 233sqm Activity Centre-zoned site.

96 Main Street, Greensborough

The 832sqm shop, leased to a yet-to-open First Choice Liquor bottle shop, sold for $7.4 million on a 4.7% yield. First Choice has a 7-year lease returning $380,163pa.

747-755 Toorak Road, Hawthorn East

An investor paid $6.7 million for the 2,697sqm corner site occupied by 7-Eleven, reflecting a 3.94% yield. 7-Eleven has a brand-new 10 5 5-year lease returning $264,128pa plus GST.

279 Doncaster Road, Balwyn North

The 250sqm building on a 231sqm site, leased to 2 health tenants, sold for $1.68 million on a blended yield of 4.1%. It returns rental of $68,490pa.

2 St Kilda Road, St Kilda

The 60sqm shop sold for $660,000 on 5% yield. Longstanding café Hugs N Mugs has a new 10-year lease plus options to 2043 returning $33,000pa net.

644 Sydney Road, Brunswick

A banh mi shop will open in the fitted food premises formerly home to Bar Texaco. The operator of Vietnamese eatery Good Days leased the 180sqm building for 5 years at $45,000pa plus outgoings and GST.

267 Little Collins Street, Melbourne

Global camera group Leica leased the 360sqm premises for its new Melbourne CBD flagship store, signing an 8-year lease at $1,000/sqm.

146 Canterbury Road, Heathmont

A Brighton-based butcher leased the 90sqm space at $45,000pa net.

143 Cecil Street, South Melbourne
Bottle shop operator Thirsty Camel bought the 549sqm 2-storey office building for $3.5 million.

Suite 2.05, 202 Jells Road, Wheelers Hill

An owner-occupier purchased the 46sqm suite for $290,000.

36-40 Strzelecki Avenue, Sunshine West
Hicks Transport Group bought the 6,301sqm site with a 937sqm building for $7.25 million.

30 Sarah Street, Campbellfield

A local investor with long-term plans to occupy paid $2.4 million for the 1,060sqm office and warehouse, which is on a 1,539sqm site with 12 car parks. It is leased to Express Steel Sales Pty Ltd until February 2024 with no options, returning $95,000pa plus outgoings and GST reflecting a 3.95% return.

290 Waverley Road, Malvern East

The 290sqm automotive workshop occupied by Ultra Tune on a monthly tenancy sold for $1.625 million, on a 4.1% yield. The new owner will look to negotiate a new lease with the tenant.

Unit 15/35-37 Canterbury Road, Braeside

The vacant 245sqm office and warehouse sold for $681,000.

76-78 Beach Road, Sandringham
The 1,963sqm Commercial 1-zoned site, across the road from Trevor Barker Beach Oval, sold for $7.1 million to a developer. It has a permit for 26 apartments across 4 levels.

66-70 Settlement Road & 27 Torquay Road, Belmont
The 3,533sqm site has 600sqm of buildings used by a GP clinic, allied health and pathology, and sold for $5.825 million, on a sub-5% yield. It has head leases to GMHBA and Clinical Labs for 5 years with options.

Melbourne CBD Leasing Activity Picks Up In Post-COVID Environment
Melbourne’s CBD has sprung back to life, with retail tenants of all types making commitments to spaces in the city in anticipation of the ongoing return of workers to the office and amid a huge rebound in nightlife and weekend activity.

According to Fitzroys new Walk the CBDreport, businesses both already based in the CBD and in the suburbs are becoming more active in enquiry and willing to commit to space heading into 2023.

The report, which details vacancy rates and tenancy breakdowns in the Melbourne CBD’s major retail precincts, has been released just as Fitzroys CBD Leasing team has struck 8 new retail leasing deals across the city to a mix of food and beverage, specialty and service tenants.

Headlining the deals is a lease to Mörk, which expanded into the city 2 years ago – into a 7sqm lift shaft in Equitable Place – and has enjoyed ongoing success, prompting owners Kiril and Josephin to open a second CBD location at 13 Centre Place on a 5 5-year deal.

Close by, fashion and streetwear retailer Underground Archive, which focuses on the secondary market for preloved designer goods, has chosen Flinders Lane to open its first physical store after being based online, building and trading to a loyal customer base for the past 7 years. They’ll open at Shop 4, 237-239 Flinders Lane.

In Howey Place, Union Kiosk has seen fantastic success since it relocated and opened its doors in the laneway 6 months ago. As the business has grown and flourished, it became evident that a larger space was required, and so it has committed to moving into the larger adjacent property at number 12.

Also in Howey Place, bespoke garment maker Mr. Cuff has built a thriving business after opening up at number 6-8 through the City of Melbourne and Victorian Government’s Shopfront Activation Program and has now signed a 2.5-year lease at $1,100/sqm.

Another operator expanding within the CBD is Siam Botanical Massage, which currently trades within the Oaks Hotel on Collins Street and has taken a 5+5 year lease at 122 Hardware Street, while Hunt Leather has moved from Little Collins Street to 271 Collins precinct on a 3+3+3 year term.

“There are multiple tenants with a successful track record of CBD trade that have witnessed the post-COVID rebound in CBD visitation for themselves, and have decided to invest further in the city and open new locations,” said Fitzroys Travis Keenan.

Meanwhile, 2 suburban operators will be opening new stores in the CBD, on Makers Lane within the new NAB headquarters building at 405 Bourke Street.

Supernova Coffee, based on Glenferrie Road, Hawthorn, known for the Ninety Plus coffee and the Yuzo offering that is amongst the most expensive coffee in Melbourne and on earth – selling for $198 per cup – will be opening up, while South Yarra French Patisserie La Yeahllow will serve their elegant cakes and desserts from a new flagship in the building.

“We’re seeing suburban traders making the considered move into the CBD. There’s clearly confidence that the workforce will continue to steadily return in 2023 and businesses are making commitments based on these expectations,” said Fitzroys James Lockwood.

The face of Melbourne CBD retail has been through multiple phases since COVID and into 2023.

“Citywide, we’ve seen changes across the board from a tenant profile perspective,” Lockwood said.

“Over 2022, in the first quarter we witnessed an influx of specialty retailers take up leases in the CBD Core as clothing brands sought to redefine their in-store offering and take up central city positions. As we moved further out of restrictions mid-year, we noticed enquiry increase from hospitality operators with the overall long-term perspective from tenants become increasingly positive.” As evidenced by Fitzroys recent deals, suburban operators have been taking advantage of good opportunities.

“The CBD leasing market has been very positive so far this year, with an upbeat sentiment driving demand. Business confidence has risen and there is anticipation of growing office occupancy, tourist and student numbers in the Melbourne CBD.”

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.