Weekly Wrap

Fitzroys Weekly Wrap - 25th August 2023

Posted on 25th August 2023

118-120 Smith Street, Collingwood
Located next door to the Grace Darling Hotel, the double-fronted 254sqm building with 2 shops and a residence sold for $2.62 million, on a yield of 4%. It returns $107,690pa plus GST.

12 Nolan Street, Kerang
The 4,132sqm Woolworths supermarket sold for $16.25 million. It has a 10-year lease and returns $975,000.

731-733 Burke Road, Camberwell

The 230sqm building, comprising 2 shops and an apartment, on a 430sqm site sold for $4.25 million. The retail spaces are occupied by Subway and a pawnbroker.

369 High Street, Northcote

Offered for the first time in 73 years, the 170sqm retail building on a 432sqm site sold for $2.25 million.

54 Bonwick Street, Fawkner

The 175sqm building, leased on a 10-year term from December 2022 to a grocery store, sold for $490,000, on a 4.4% yield.

101 Clarke Street, South Melbourne
An owner-occupier bought the 1,025sqm multi-storey commercial building for $6.56 million. The building is on a Commercial 2-zoned corner site and includes 16 off-street car parks.

276 Flinders Street, Melbourne

Melbourne-based tech start-up Marqo leased the 197sqm level 9 space for 5 years at $650/sqm.

461 Bourke Street, Melbourne

Constraint Technologies International leased 541sqm on level 17 for 5 years at $440/sqm.

73 and 2/75 Capital Link Drive, Campbellfield
The neighbouring office and warehouses sold separately to owner-occupiers for $3.25 million, at $2,498/sqm, and $1.6 million, at $2,566/sqm.

1 Fourth Avenue, Sunshine

The 800sqm building on a 1,600sqm Industrial 1-zoned site sold for $1.235 million. It is leased until December to Amazing Tiles & Stone Pty Ltd, returning $44,000 plus outgoings and GST.

191 O’Herns Road, Epping

Caravan and camper trailer company Boss Australia leased the 1,128sqm office and warehouse on a 1,510sqm site at $210,000pa.

9/1488 Ferntree Gully Road, Knoxfield

The 780sqm showroom, office and warehouse with 7 on-site car spaces was leased at $100,000pa, or $128/sqm.

307 Nepean Highway, Frankston
A private developer bought the 697sqm Mixed Use-zoned site for $752,500.

Strong Result for Premium Hospitality Investment in Surging Precinct
A corner hospitality freehold with a quality tenant has proven the ongoing pull of bricks-and-mortar investments in Melbourne’s inner north, with investors from across Australia competing for the asset on the way to a strong sales result.

Fitzroys’ Chris Kombi and Ervin Niyaz sold 331-335 Lygon Street, Brunswick East for $3 million, on a tight 4% yield and high land rate of $9,772/sqm. Private investors traded the asset.

Prominently positioned on the corner of Lygon and Victoria Streets, within a buzzing hospitality and lifestyle precinct just 5 kilometres from the CBD, the property was offered with a long lease 7+7+7-year lease to Figlia Pizzeria & Grana Deli, by acclaimed food and beverage operators Luke Skidmore and chefs Andreas Papadakis and Alberto Fava, whose stable includes prized eateries Tipo 00 and Osteria Ilaria.

The entirely renovated single-storey building of 290sqm is on a generous land area of 307sqm and has a commanding dual street frontage of 35.23m to the busy intersection.

Kombi said there was local and interstate interest in the asset, mostly from investors looking for a high-profile corner property in an inner-city location with strong capital growth potential.

“This was ultimately purchased as a passive set-and-forget investment, with a long lease to an established and recognised hospitality tenant, and which was fully renovated, therefore requiring no work,” Kombi said.

“The purchaser also recognised that this inner north location is rapidly transforming and gentrifying. There are several new mid- and high-rise apartment buildings being developed in the area, in addition to a number of projects completed in recent years, and factories in the side streets are being converted to trendy office spaces and warehouse living.”

Niyaz said this was another vote of confidence from the market in the safety of bricks and mortar in the current interest rate environment.

“Amid stock market and residential market volatility - and despite the higher interest rate environment - we’re still seeing investors pursue well-located commercial property assets with secure leases to high-quality tenants. That’s continuing to flow through into very competitive campaigns and strong sales results.”

Luxury Giant Buys Former Ivy Nightclub Building for $39m
Luxury fashion house Christian Dior is expected to open a bigger Melbourne CBD flagship store after its parent company LVMH bought the former Ivy Nightclub building for $39 million.

The 5-level Beaux Art-style building at 145-149 Flinders Lane is on the corner of Russell Street, opposite Chanel’s boutique. Christian Dior is likely to move in from its current store at the base of the Westin Melbourne, at 205 Collins Street.

LVMH is worth $670 billion and is the owner of luxury brands including Louis Vuitton, Bulgari, Tiffany, Moët & Chandon and Givenchy, as well as Christian Dior.

The vendors of 145-149 Flinders Lane, Perth-based investors Adrian Fini and the Jones and Mack families, bought the building in 2010 for around $7.5 million.

Sydney Hospitality Identity Buys Meyers Place Warehouse
Sydney hospitality identity Justin Hemmes, who owns and runs a portfolio of major venues via his Merivale business, has bought a Meyers Place warehouse for more than $16 million.

Currently, the 1940-built modernist warehouse Kantay House, at 12-18 Meyers Place, is home to Argentinian steak house San Telmo, cocktail bar Lily Blacks, and eatery Pizza Pizza Pizza.

On a 603sqm site, it last sold in 1993 for $910,000.

Merivale operates more than 70 venues across NSW, including Mimi’s, Totti’s, Coogee Pavilion and Mr. Wong. Hemmes is set to expand the business into Melbourne following the circa-$40 million purchase of the 7-storey Tomasetti House at 277 Flinders Lane in the CBD, where he will open a contemporary Chinese restaurant from the ground floor, and potentially a rooftop bar and basement venue.

In 2021 he also bought the Lorne Hotel for $38 million, which now houses casual Italian eatery Totti’s.

Vacant 4-storey CBD Building Sells for $11.85m
A vacant 4-storey building in the CBD is set to be used for education purposes after selling for $11.85 million.

The 144-148 A’Beckett Street building, near the Queen Victoria Market, has 1,187sqm of floor space and is on a 288sqm Capital City 1-zoned site on the corner of Anthony Street.

It was offered by the owners of cooking wares store Scullerymade, who acquired the asset in 1991 for $785,000.

Around the corner, the City of Melbourne recently appointed Lendlease to the $1.7 billion redevelopment of the 3.2ha southern portion of the Queen Victoria Market precinct, to be known as Gurrowa Place. Lendlease will develop a 560-unit build-to-rent and affordable housing tower, as well as a 28-level, 43,000sqm office tower, and a 1.8ha public park.

In addition, Student housing provider Scape will separately develop a $350 million to $400 million student accommodation tower with 1,100 beds, while the existing heritage Franklin Street Stores will be turned into a new retail village and a new civic pavilion will be created, to be named the Queen’s Corner Building.

    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.