Weekly Wrap

Fitzroys Weekly Wrap - 8th December 2023

Posted on 08th December 2023

78-92 Bulla Road & 13-15 Rawson Street, Bulla
A private investor bought the 1.72ha site for $15.12 million. The property is home to a BP service station, Hungry Jack’s and the Black Horse Hotel and Motel, and includes 5,574sqm of expansion land.

24-26 Mair Street East, Ballarat Central

A local investor bought the Ballarat CBD property home to JB Hi-Fi for $8.155 million, on a 5.22% yield. The 1,500sqm building is on a 2,744sqm Commercial 1-zoned site with 36 car parks and 210m of street frontage. JB Hi-Fi has a recently renewed 6+5-year lease.

305 Coventry Street, South Melbourne

A local investor bought the 70sqm building occupied by Market Lane Coffee, for $1.425 million. Market Lane Coffee leases the property on a 10+5-year deal running to 2032.

74 Eastern Road, South Melbourne

A first-time commercial property buyer paid $1.1 million for the 110sqm ground-floor strata property. It is occupied by wine bar, restaurant and café WoodsYard on a 5-year term with 3 further options to 2040.

6/223 Bridge Road, Cobblebank

The 131sqm retail space occupied by a bottle shop sold for $1.03 million. It has a 10-year lease to March 2033 plus options to 2043 that returns $62,225pa.

45 & 47 Copping Street, Richmond
A Sydney-based business bought the converted warehouse building for $5.7 million with plans to move its Melbourne operations to the site.

A4.2/65-85 Turner Street, Port Melbourne

The 84sqm office space sold for $300,000.

1A/387-389 Springvale Road, Springvale

The 498sqm ground-floor office occupied by education provider QS Education sold for $1.638 million. The new 5-year lease returns $123,732 per annum plus GST.

18A Westside Drive, Laverton North

The 950sqm building food production facility, comprising multiple cool rooms and on 1,809sqm of land, sold for $2.8 million.

Units 1-4, 214-218 Grange Road, Thornbury

Bastion Cycles leased the nearly-completed units, totalling 1,368sqm, for 10 years at $225,700pa net plus GST.

19-23 Dorcas Street, South Melbourne
Developer Time & Place’s Tim Price bought the 896sqm site for around $15 million. It is next door to the $160 million Middleton Lane project proposed by Time & Place and V-Leader at 11-17 Dorcas Street.

203 Ontario Avenue, Mildura
The 429sqm purpose-built medical facility on a 1,532sqm site sold for $2.18 million. Country Hearing Care has a brand-new 10+5+5-year lease that returns $108,000pa plus GST.

520 Plenty Road, Mill Park

A doctor leased the 168sqm former F45 fitness centre for 6 years at $68,000pa net.

Investors Show Faith in Fishermans Bend Precinct Development, First Blue-Chip Supermarket Offering Sells for $17.5m
The first major blue-chip supermarket offering in the Montague precinct of Fishermans Bend - leased to S&P/ASX 20 giant Coles - has sold for $17.5 million, in a big show of faith from investors in the development of Australia’s largest urban renewal precinct.

Fitzroys’ Chris Kombi, Chris James and Ben Liu sold the property at 263 Normanby Road, South Melbourne, located on the ground level of the brand-new prestigious R.Iconic development. The deal is one of the biggest sales of a strata-titled retail property across Australia in 2023.

The property was sold before Coles and Liquorland had commenced fit out works of the 1,752sqm space positioned at the base of the 31-level R.Iconic residential tower, which has a dominant 90-metre frontage to Normanby Road and Boundary Street.

The high-profile R.Iconic tower has delivered 456 apartments, while Stage 2 of the project is planned to contain 471 dwellings across 40 levels, located next door at 253 Normanby Road. Normanby Road is set to become a major high-rise thoroughfare, with several 30-plus level developments under construction and planned for the precinct.

“Inner-city Coles investment opportunities are extremely rare, let alone with this unrivalled level of trade growth potential. This campaign and the result were essentially a big show of faith from investors in the future of Fishermans Bend.

“The R.Iconic development is one of the best new buildings in the precinct, which further drove the heated competition between buyers.

“Local, national and international buyers all recognised the never-before-offered chance to invest in a brand-new blue-chip retail asset located in Australia’s largest urban renewal precinct.”

Coles is perfectly positioned opposite the Montague Street Light Rail Station, providing access to thousands of daily commuters and a direct route to the Melbourne CBD and surrounding suburbs. The property is within walking distance to Crown Casino, Southbank Promenade, the Melbourne CBD and Docklands. There is also convenient access to major arterials including Citylink and West Gate Freeway.

“The property is at the epicentre of the Montague precinct’s building boom, with 4,800 dwellings within only 500 metres of the property at various stages of completion, planning and construction,” James said. “Coles undertook a feasibility study of the area and has made the astute decision to get into a prime location of the Montague precinct, within affluent South Melbourne, in a corner site on the cusp of a building boom. Investors clearly agreed on the strategic location and its trade prospects which will underpin the lease covenant.”

“Coles has found a position at the seat of Australia’s largest urban renewal project. The 480-hectare Fishermans Bend currently has a population of 4,3541, and Melbourne City Council expects this will skyrocket to 80,000 residents and provide employment for 80,000 people by 20502,” James said.

“We already starting to see the development potential of the Montague precinct come to fruition. We’re also starting to see the flow-on effect to the area’s retail landscape,” James said.

The apartment development pipeline in the immediate area will provide an excellent catchment for Coles in the coming years, and the precinct’s focus as a key residential and employment hub offers unrivalled prospects for ongoing trade growth.”

Liu said, “The resilience of essential services and daily needs retail have been demonstrated resoundingly over the past few years, and this deal is the latest evidence of ongoing demand from investors for highly defensive assets deemed to be recession-proof.”

“Income-producing assets purchased now in the current economic environment will prove to be very prudent investments over time.”

MPG Buys West Melbourne Aldi Supermarket Property for $14.415m
Property funds manager MPG has bought a strata-titled Aldi supermarket property in West Melbourne for $14.415 million.

The Aldi is at the base of the $87 million residential development The Marker, by Lechte Corporation, CDL Australia and Crema Group, at 512 Spencer Street. The 1,595 sqm supermarket has a 14-year lease.

MPG has also just acquired a strata-titled office building in Sunshine occupied by the Victorian government for $14 million, on a 6.25% yield.

    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.