Weekly Wrap

Fitzroys Weekly Wrap - 15th March 2024

Posted on 15th March 2024

18 Beatty Avenue, Armadale
A private investor bought the 189sqm building, home to Toorak Cellars, for $3.76 million.

100 Cookes Road, Doreen

The 388sqm property occupied by a Foodworks supermarket sold to an investor for $2.4 million, on a 5.5% yield. It has a 10-year lease with options to 2048, returning $133,473pa.

7-9 Northumberland Road, Sunshine North

Offered for the first time in over 60 years, the 379sqm building on a Commercial 1-zoned sold with vacant possession for $2.1 million.

135 Nicholson Street, Footscray

An investor paid $1.925 million for the 472sqm building, which comprises 2 retail shops and 3 apartments and returns $131,000pa net. It is on a 225sqm Activity Centre-zoned site.

129 Puckle Street, Moonee Ponds

The single-level 105sqm building on a 138sqm site sold for $1.055 million. It has a 6+6-year lease to Promedic Laser & Skin returning $51,335pa plus outgoings and GST.

Shop 6, 111 Mountain View Road, Briar Hill

The bakery and cake shop tenant of a 70sqm brick building bought its own premises for $700,000. It was paying $31,214pa net in rent on a lease until February 2027.

21 David Street, Richmond
An investor paid $2.82 million for the 560sqm converted warehouse on a 425sqm site, which is leased to August Digital Marketing on a new 5+5-year term.

15/3 Westside Avenue, Port Melbourne

The 95sqm 2-level building sold for $420,000.

16 Harper Street, Abbotsford
The 1,190sqm office and warehouse building sold for $4.050 million. It is on 760sqm of land with 10 car spaces, and has a lease expiring in June that returns $190,400pa.

Factory 2, 1 Bray Street, Hastings

A local buyer paid $645,000 for the 329sqm strata-titled showroom and warehouse property, which they will use for their four-wheel drive accessories business.

Unit 7, 5-7 Paul Court, Dandenong

A local investor bought the 300sqm showroom/warehouse unit for $606,000. It is occupied by Turnleys Beautopia, returning $24,564 per annum plus GST gross.

21-23 Stanley Street, West Melbourne
A local land banker paid $1.441 million for the 163sqm site, which has a 1+2-year lease remaining.

21 Grosvenor Street, Abbotsford

The 367sqm vacant site with a former 3-bedroom residence and rear workshop sold for $1.315 million.

46 Dendy Street, Brighton
A local investor paid $17.5 million for the childcare centre property, reflecting a 5.19% yield. G8 Education occupies the 2,380sqm facility, licenced for 171 places and with a 15+10+10-year triple-net lease that returns $910,047pa plus outgoings and GST. The facility is on a 1,839sqm site.

Striking South Yarra Office Investment Sells After Competition Between Investors and Owner-Occupiers
In one of Melbourne’s first commercial property auctions of 2024, a striking South Yarra office building has sold under the hammer for $2.13 million as the suburb’s transformation continues to attract investors and owner-occupiers alike.

Fitzroys’ Lewis Waddell and David Bourke sold 59 Garden Street, South Yarra on behalf of a local family. The purchaser was a local investor.

The sale price reflected a tight 4.1% initial yield and a high land rate of $11,000 per sqm.

The property comprises a multi-level 350sqm building with immaculate light-filled office improvements, leased to highly-regarded architecture firm Telha Clarke. It is on a 195sqm sqm site with on-site parking, and offers favourable Activity Centre Zoning that allows for numerous redevelopment outcomes.
Waddell said multiple bidders competed for the asset.

“This attracted a strong mix of investors and a lot of owner-occupiers given how well the building presented,” he said.

“The purchaser acquired the property with a long-term view in mind, taking advantage of the strong tenant covenant and the opportunity to land bank an Activity Centre-zoned site close to the upcoming $1.5 billion redevelopment of the Jam Factory and other projects in the area that will really add to its vibrancy.”

Waddell said the smaller office building market is performing well for well-located assets that have character and appeal to creatives and family offices.

“A growing number of Melburnians are looking to live, work and play in highly accessible locations with great lifestyle and hospitality amenity. We’re expecting to see ongoing growth in demand for these types of spaces from both investors and owner-occupiers,” he said.

Gurner, Qualitas and Newmark Capital’s Jam Factory redevelopment will deliver new office space, 448 apartments, a 5-star hotel, and an overhauled retail and cinema offering.

South Yarra is also witnessing ongoing development at the neighbouring high-density Forrest Hill precinct, while other key projects on the horizon include Oreana’s $250 million redevelopment of South Yarra Square and V-Leader’s $90 million Hotel Claremont project.

Melbourne’s Sub-$5m Industrial Market Off to Hot Start in 2024
Melbourne’s sub-$5 million industrial market is off to a hot start in 2024, with one of the market sector’s first auctions for the year netting a strong result.

Fitzroys’ Brent Glassford and Lewis Waddell sold 15 Coolstore Road, Croydon for $1.44 million, on a tight 4.8% yield.

The 550sqm building is on an 831sqm Industrial 1 zoned site and is occupied by national brand Goodyear Autocare on a new 5-year lease.

Glassford said the campaign generated more than 60 enquiries, culminating in multiple bidders on auction day and the property selling under the hammer.

“The quality of tenancy covenant was a huge attraction. Longstanding tenant Goodyear is one of the world’s largest tyre companies and it had just signed up for another five years, showing their confidence in the property and the location within Melbourne’s eastern suburbs,” he said.

The property is situated near the Main Street, Croydon shopping precinct and close to the new Croydon Station transport hub, which is undergoing a full redevelopment and set to open in 2024. It also offers excellent transport linkages via Eastlink and is 1km from Maroondah Highway.

Glassford added, “The sub-$5 million market has been heavily influenced by owner-occupiers in recent months, but this campaign demonstrated the ongoing strength and depth of demand of the investment market when clear-cut opportunities present themselves.

“The prospect of falling interest rates later in the year is expected to result in yet more buyers entering the market over the course of 2024.”

He said that has become more likely given Australian Bureau of Statistics data has shown that inflation has continued to fall in recent months back towards the Reserve Bank of Australia’s target range.

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.