Weekly Wrap

Fitzroys Weekly Wrap - 7th July 2023

Posted on 07th July 2023

12 Dundas Street, Thornbury
Offered for sale for the first time in 60 years, the 1,170sqm landholding with a 20-unit apartment complex sold to a Sydney-based purchaser for $3.53 million. The sale price reflected a 3.3% yield and the buyer plans to refurbish the property and hold it as an investment.

276 Wantirna Road, Wantirna

A local developer paid $4.21 million for the 3,228sqm site, which is zoned Residential Growth.

415 Bourke Street, Melbourne
A local barrister paid $2.1 million for the 212sqm penthouse and rooftop of Rochelle House.

Suite 204, 140 Bourke Street, Melbourne

A business that has been leasing on Collins Street for over 10 years bought the strata office space for $1.23 million.

Suite 27, 1 Ricketts Road, Mount Waverley

An owner-occupier bought the 97sqm suite for $490,000.

300 Darebin Road, Fairfield
A local owner-occupier hire business bought the 1,863sqm corner warehouse for $4.05 million.

19-29 Link Court, Brooklyn

ArcStructural leased the 4,000sqm transport facility on an 18,220sqm site at $900,000pa.

7/103 Garden Road, Clayton

The 416sqm office and warehouse with 6 car parks sold for $1.4 million.

15-21 Coburns Road, Brookfield
An investor paid $7.75 million for the Genesis Health and Fitness Centre property. The 2,220sqm purpose-built centre is on a 5,916sqm corner site and has a 12-year lease from July 2015 with 2 further 6-year terms.

Unit 5, 422 Collins Street, Melbourne

A Europe-based investor sold the 531sqm ground floor property with vacant possession for $4.15 million to a local buyer.

263-265 & 267 Swan Street, Richmond

2 adjoining buildings on 522sqm of Commercial 1-zoned land sold for around $4 million. They are currently occupied by leather bag retailer A-Esque and entertainment venue Palace of Magnificent Experiences, returning a combined $170,223pa.

95 Puckle Street, Moonee Ponds

An investor paid $1.62 million for the 100sqm building, which is on a 140sqm site, on a 4% yield. Carolina Lifestyle has a 3-year lease.

510 Plenty Road, Mill Park

A new dessert and café business leased the 180sqm retail space for 3 years at $60,000pa.

60 Clow Street, Dandenong
A private investor paid $11.6 million for the former RSL aged care facility, which has 45 villa units and 7 studios on the triangular 8,992sqm site.

Premier Brighton Investment Leased to ASX-Listed Major Lender
Arguably Australia’s best-performing shopping strip, Church Street, Brighton, is set for a rare property auction in one of the best Melbourne strip retail investment offerings for 2023.

Fitzroys’ Mark Talbot and Tom Fisher are marketing 35 Church Street, with a renewed lease to long-standing tenant, major lender NAB, and which will go to auction on Thursday, 27 July at 1pm.

Expectations are of $6.7 million-plus.

The property is on a substantial site area of 288sqm with a large 8.5-metre frontage to the prime of the strip.

NAB, which has been at the site for 30 years, has a renewed 5 5 5-year lease that brings a strong income of $254,616 per plus outgoings including land tax.

“This is undoubtedly one of the best Melbourne shopping strip investment opportunities of 2023,” Talbot said.

“It’s hard to find more than a good-sized property with a renewed, secure lease to an ASX- listed big 4 bank in the prime of Melbourne’s best-performing shopping strip.

“The benefit of land tax being recoverable from the tenant is a huge attraction to investors looking to purchase this type of asset, and together with a secure lease-term makes this investment close to risk-free.

“Income-producing bricks-and-mortar assets remain a safe investment option, and multiple interest rate rises haven’t deterred investors from pursuing high-quality opportunities. We’re expecting interest from locals and Melbourne buyers, and from interstate and international parties as well. Church Street, Brighton’s reputation as one of the best Melbourne shopping strip locations to invest reaches far and wide.”

The property is positioned within the most highly sought-after and tightly-held prime section of Church Street, between Carpenter and St Andrews Streets. Neighbouring tenants include a number of Australia’s leading high-end retailers in Country Road, Mecca, Scanlan Theodore, Seed Heritage, Bed Bath N’ Table, Sportscraft, Husk and Saba while the famous Dendy cinema complex is opposite.

“Melbourne’s shopping strips have demonstrated their resilience over recent years, and none more so than Church Street, Brighton,” Talbot said.

According to Fitzroys’ most recent Walk the Strip report, Church Street, Brighton recorded the lowest vacancy of any of Melbourne’s iconic shopping strips in 2022, at just 0.7%. Its long-term average of 1.68% is well below the Melbourne-wide average of 8.07%.

“Church Street’s strong reputation, affluent and established catchment, and constrained supply will continue to see commercial property tightly held, with a long queue of retailers and operators always seeking space. These have created excellent conditions for reliable rental growth,” Fisher said.

Brighton enjoys a strong demographic and high disposable income from the immediate neighbourhood with the median house price for Brighton at a substantial $3.2 million.

“The immediate catchment has been bolstered with the introduction of medium-density residential developments in what is broadly a low-rise suburb, while the suburb is home to a number of highly sought-after private schools,” Fisher said.

Fitzroys has been responsible for almost all sales along Church Street since September 2019. Those sales have included the $16.2 million sale of 71-73 Church Street & 36 Carpenter Street, home to Nike, Ecco and Laurent, on a 3.8% yield, 51 Church Street, home of Flight Centre, last September for $4.45 million, and 13 Church Street, home to international retailer Oroton, which sold for $6.07 million in 2021 at 2.5%.

Fitzroys last year also sold the trophy investment opportunity at 28 Carpenter Street, just moments from Church Street, for $8.38 million under the hammer, on a very sharp 3.08% yield.

Offshore Investor Buys Historic North Melbourne Landholding
An offshore investor has paid about $10 million to acquire a historic 4,822sqm North Melbourne site owned by the Uniting Church of Australia.

The 579-599 Queensberry Street and 51-61 Curzon Street site has been used as a site of worship by the Church for 170 years. It comprises a Gothic Revival bluestone church, an 8-bedroom manse, terraces, halls, and a 1980s office building.

The church originally belonged to the Presbyterian Church, which began holding services from the site in the 1850s. It merged with the Methodist and Congregationalist churches in 1977 to become the Uniting Church.

One of the halls on the site was where the Labor party split in 1955, with the split-off faction ultimately becoming the Democratic Labor Party.

Dual-Branded CBD Hotel Sells for $170m
A subsidiary of Singapore’s Worldwide Hotels Group has bought the 472-room Novotel and Ibis Melbourne Central Hotel for $170 million, in the city’s biggest hotel deal in 6 years.

Completed in 2018, the 399 Little Lonsdale Street property was Melbourne’s 1st dual-branded hotel, with budget-style Ibis-branded accommodation on the lower floors and 4-star Novotel rooms on the higher floors.

Monash University Buys Clayton and Parkville Sites
Monash University has acquired sites opposite its Clayton campus from Telstra and in Parkville from the CSIRO.

In Clayton, Monash University has paid about $30 million for the 2.3ha site at 762-766 Blackburn Road, which is directly opposite its campus and within an emerging biomedical and life sciences hub that includes the new Victorian Heart Hospital and the $2 billion Moderna vaccine facility.

Telstra offered the site as part of a bigger 6.5ha landholding that has been home to the major telco’s global operations centre.

Last year, Monash University bought the 3.6ha site at 611-625 Blackburn Road for $66 million from Toyota Australia.

Meanwhile, the university has also bought a 5,000sqm site at 343 Royal Parade, next to its Parkville campus that is home to its faculty of pharmacy and pharmaceutical sciences, from the CSIRO. The CSIRO had used the property as a research hub since the 1950s.

The site is within Melbourne’s Biomedical Precinct, home to hospitals, including the Royal Melbourne Hospital, Royal Women’s Hospital, Royal Children’s Hospital and the Victorian Comprehensive Cancer Centre, as well as medical and biotechnology organisations and universities, including the University of Melbourne.

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.