Weekly Wrap

Fitzroys Weekly Wrap - 22nd March 2024

Posted on 22nd March 2024

428 Toorak Road, Toorak
A local private investor paid circa $8.5 million for the 608sqm building, which comprises 5 ground floor retail spaces and level 1 offices, on a 376sqm Commercial 1-zoned corner site.

312 Stephensons Road, Mount Waverley

The 373sqm partly-tenanted 2-level building sold for around $2.355 million to a medical owner-occupier. The 180 sqm ground floor is vacant use, and the first floor is occupied by Cantible School of Music, returning $41,523pa plus outgoings and GST.

2/127 Merrindale Drive, Kilsyth

The 142sqm building on an 818sqm site occupied by café Industrie sold for $920,000. Industrie has a 3+3+3-year lease returning $48,300.64 plus GST.

46 Oleander Drive, Mill Park

The 172sqm strata-titled property sold for $830,000, on a 5.9% yield. It has a 5+5-year lease to eatery Sit N Dip Cocktails returning $49,172.76pa plus GST.

1-3 Station Street, Malvern
The 2-level 172sqm building, home to AFL player managers Connors Sports Management, sold for $1.71 million. Connors Sports Management has a 7-year lease returning $85,000pa plus GST.

Suite 5, 6 Croydon Road, Croydon

A local investor bought the 104sqm office suite for $533,000.

Unit 5/216 Blackshaws Road, Altona North
The 557sqm office and warehouse on a 708sqm site sold for $1.405 million.

14/31-39 Norcal Road, Nunwading

The vacant 198sqm office and warehouse within the Industria Estate sold for $1.1 million.

54/84-110 Cranwell Street, Braybrook

The 155sqm warehouse unit with mezzanine space sold with vacant possession for $580,000.

45 Main Road West, St Albans
The 1,1228sqm corner site with 119m of frontage directly opposite St Albans train station sold for $3.32 million. It has a 2-level 545sqm building returns income of $95,000pa plus outgoings on a lease running until 1 July 2025 with no further options.

386 Burwood Highway, Burwood
ASX-listed Aspen Group paid $8.11 million for the offering of 81 apartments within a student accommodation facility next to Deakin University.

Melbourne’s Prime Shopping Strip Market Opens 2024 with Strong Result
Melbourne’s prime shopping strip investment market opened 2024 with a strong result, with the Lygon Street newsagency in the heart of the famous precinct selling on a tight 4% net yield.

Fitzroys’ Mark Talbot and Shane Mills sold the two-level retail and office building at 325 Lygon Street, Carlton for $1.78 million on behalf of the Saffar and Durlacher families.

The purchaser is an existing owner of property in the street.

The 325 Lygon Street property is leased to longstanding tenant Carlton Newsagency, which has been at the property for around 20 years. Rental return is $77,712pa plus outgoings and GST, with the current 7-year lease ending 31 January 2025 with 2 further terms of 5 years each.

“The location spoke for itself - this is positioned in the absolute heart of one of Melbourne’s most famous shopping and dining strips,” Talbot said.

Talbot said the property is in the absolute prime of Lygon Street, between Faraday and Elgin Streets, opposite Lygon Court - home to Cinema Nova, Brunetti Classico and Woolworths - and amongst the and the strip’s famous cafés, restaurants, bars, retailers and entertainment venues including Tiamo, Heartattack and Vine, Milk the Cow, Grill’d, DOC Pizzeria, Crinitti, King and Godfrey, Seed, Mecca, Sportsgirl, Country Road, Readings, to name a few.

“While there is strong potential for significant rental growth, the buyer was confident in purchasing at a 4% yield even with the chance that the property may become vacant in January,” Talbot said.

“This is an incredibly tightly held part of Melbourne. Lygon Street is arguably Australia’s most famous dining strip and has come back from COVID in a big way, and there is evidently confidence in the market about its investment credentials and trade prospects.”

Vacancies on Melbourne’s most famous dining strip are at their lowest in years as Melburnians again embraced dining and eating out, tourists returned in bigger numbers, and students came back to university. According to Fitzroys’ most recent Walk the Strip report, vacancies on Lygon Street have come down from 20.0% in the depths of COVID to now sit at 6.0%.

“The return of local and international students to Melbourne’s education precinct close by has also underpinned the return of trade along Lygon Street, and the rapid transformation of Carlton to accommodate and encourage student and residential apartment developments will further enhance its viability.”

Lygon Steet, Carlton is close to major education and health providers including University of Melbourne, RMIT, Royal Melbourne Hospital and St Vincent’s Hospital.

Talbot said that importantly, Lygon Street is set to become even more accessible in the near-future. Excellent tram and bus connections are currently available, and the incoming Parkville Station, part of the Melbourne Metro Tunnel project, is set to open in 2025. There are also exceptional public car parking options close by including the Elgin Street Public Car Park providing over 200 car spaces.

Moonee Ponds Properties Snapped up Prior to Campaigns’ Close as $6.5m-plus Worth of Inner-Melbourne Offices Sell
Investors are ardently looking to take advantage of heightened demand for highly accessible, well-located office space in rapidly-developing locations, snapping up more than $6.5 million worth of offices in Moonee Ponds and South Yarra.

Fitzroys’ Ervin Niyaz and David Bourke sold Levels 1 & 2, 5 Everage Street, Moonee Ponds in conjunction with Patrick O’Callaghan of O&Co, for $3.2 million three weeks ahead of the Expressions of Interest campaign close, well above expectations.

Niyaz has also just sold 46 Pascoe Vale Road in the same suburb for $1.2 million prior to auction, while in South Yarra, Bourke and Lewis Waddell sold 59 Garden Street for $2.13 million.

At 5 Everage Street, the immaculately presented, fully-fitted commercial office encompassing 842sqm was offered with an attractive 5+5+3+3-year lease to longstanding co-working and flexible office space provider One Plus One Business Centre, which has been in occupation for over 20 years. The lease returns $243,000 per annum plus outgoings.

“We were able to source a knockout unconditional offer that the vendor accepted prior to the campaign close,” Niyaz said. The buyer is an Australian expat living in South Africa.

“The buyer was chasing yield and saw the property offered a secure, strong cash flow, and as a rare opportunity of this size and nature in an outstanding densely-populated, surging location with fantastic hospitality and lifestyle amenity,” Niyaz said.

“The post-pandemic working environment has seen more people embrace flexible working arrangements, with people looking to work closer to home in highly-accessible locations with quality hospitality and lifestyle amenity. Demand for these types of spaces is expected to remain on the growth path, underpinning security of tenancy,” he said.

Niyaz said the property is in a highly sought-after location in the epicentre of the Moonee Ponds booming activity centre, surrounded by apartment towers, major redevelopment, and all the lifestyle, retail and hospitality that Puckle and Hall streets have to offer, as well as Moonee Ponds Central, anchored by Coles, Kmart and Aldi.

“Moonee Ponds is witnessing a generational boom. It’s seen delivery of the Mason Square precinct and more recently Penny Lane, which has brought apartments, retail and a new Hoyts cinema to the location, while the future $2 billion residential and lifestyle overhaul of the Moonee Valley Racecourse nearby has kicked off and will introduce 2,000 new dwellings as well as commercial space to the area.”

“Moonee Ponds ticks all the boxes, with a high-performing shopping, hospitality and lifestyle precinct anchored by Puckle Street, and excellent public transport linkages by train, tram and bus, and excellent connectivity to major road arterials and only seven kilometres northwest of Melbourne’s CBD.”

Niyaz has also just sold the vacant building at 46 Pascoe Vale Road, just moments from Moonee Ponds Junction, in which another investor put forward a strong bid, well above the circa-$950,000 expectations, which was accepted by the vendor ahead of auction.

The single-storey 110sqm building is on a generous 249sqm site within the Moonee Valley Activity Centre Zone 1, with six on-site car parks. It has been used as the offices of an architecture firm.

Cranbourne Set for $900m Industrial Estate
Logistics real estate companies ESR and Frasers Property Industrial have teamed up to acquire a 64.4ha site in Cranbourne from Salta Properties, which they plan to develop into a high-tech $900 million industrial estate.

Reports suggested a transaction figure of above $200 million for the 635 Hall Street property.

ESR and Frasers Property Industrial plan to build up about 75% of the lock and split the remaining 16ha between smaller subdivided lots and green space.

The joint-venture partners have delivered a combined 320ha-plus of industrial estates in Melbourne’s south east market, which is accessible via the Western Port Highway, EastLink, and the South Gippsland Freeway, while the Dandenong South Inland Port is in the pipeline.

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.