Weekly Wrap

Fitzroys Weekly Wrap - 8th May 2020

Posted on 08th May 2020

000 Retail 05

65 Clow Street, Dandenong
An investor paid $4,029,800 for the 7-Eleven service and convenience station on the corner of Stud Road. 7-Eleven has been at the site since 1978 and has a 6+6+6-year lease returning $212,290pa net.

336 Clarendon Street, South Melbourne
A private investor bought 1 of the 15 historic Emerald Hill Terrace retail properties for $2.94 million at a 3.78% yield. The 260sqm, 2-level building on a 207sqm site has a 4+4-year lease to the Red Cross on the ground floor, which includes a 3-bedroom residence.

170 York Street, South Melbourne
The Balazo family sold the former home of their old pizzeria, Baked, for $2 million at a 4.5% yield. The 3-level building is on a 112sqm corner site opposite South Melbourne Market and is leased to Spit Roast Catering Company on the ground floor with 2 levels of office space above.

24/2-6 New Street, Richmond
The 2-level, 90sqm café property, part of a converted warehouse, sold for $780,000. Galtee Café has a lease until April 2024 with a 4-year option, currently returning $46,624pa with 5% annual increases.

69 Warren Road, Parkdale
The 61sqm fish and chip shop on a 194sqm site sold for $543,250, and is leased to long-term tenant George’s Seafood until 2022 with 4+4-year options.

000 Offices 05

473 High Street, Northcote
The vacant 2-level, 73sqm office with 2 parking spaces sold for $423,000.

523 Burwood Road, Hawthorn
Australian Exhibitions Group leased the 410sqm space for 5 years at around $540/sqm.

79 Manningham Road, Bulleen
The 149sqm ground floor suite within the Bulleen Corporate Centre was leased for 4 years at $49,000pa, or $329/sqm.

6 Wedgewood Road, Hallam
Staff Australia signed a 5-year lease for the 383sqm office at $160/sqm.

202 Jells Road, Wheelers Hill
Assetinsure leased the 70sqm ground floor office for 2 years at $26,240pa.

000Industrial 05

8/9 Greaves Street, Dandenong
The vacant 185sqm warehouse with a 50sqm mezzanine area sold for $448,000.

70 Indian Drive, Keysborough
The 1,024sqm warehouse has been leased at $100,000pa.

39 Rainier Street, Clyde North
Sydney-based Flat Pack Kitchen Distributors signed a 3+3-year lease for the 650sqm office and warehouse in Brown Property Group’s Summit Business Park at $68,000pa net. The property includes 9 on-site parking spaces.

9 Dissik Street, Cheltenham
A double-glazed window and door specialist signed a 2+2-year lease over the 695sqm office and warehouse at $58,700pa.

102-108 Bridge Road, Keysborough
Vincent Cold Storage leased the 8,655sqm facility with multiple freezer and chiller rooms for 5 years at around $145/sqm. ASX-listed Centuria Industrial REIT owns the property.

000 Development 05

21-27 Queens Avenue, Hawthorn
Developer Nan Xin bought the 1,216 sqm site with a development permit and 66-apartment scheme for $8 million. The vendors bought the property in 2017 for $2.83 million.

000 Talking Points 05

Camberwell Commercial Opportunity to Tap Pent-Up Demand
Investors and owner occupiers are expected to show strong interest in a Camberwell office building that has come to the market during a time in which available quality, well-located commercial stock is rare.

Chris James and David Bourke of Fitzroys have been appointed to sell the high-exposure asset at 1186 Toorak Road in Melbourne’s high-performing inner eastern suburbs market on behalf of a private owner.

The standalone 2-level building of 882sqm with basement features 28 car parking spaces and is on a corner site of 737sqm with a high-exposure 34.5m frontage to lively Toorak Road. Zoned Commercial 1 and to be offered with a short-term overholding lease, the property offers potential to add additional levels to the building.

Expectations are of circa $6 million. An Expressions of Interest campaign will close Tuesday, 2 June.

James said there has been limited quality commercial stock coming to the market in recent times.

“Recent sales campaigns across Melbourne’s city fringe and suburban commercial markets have been fiercely contested, demonstrating there is still large amount of capital actively pursuing quality assets.

“Vendors are taking note that there is a high level of pent-up demand for well-located property.”

Fitzroys recently sold a high-profile Wellington Road office building in Mulgrave for $6.6 million, for which 5 offers were put forward, as well as the Commonwealth Bank branch site on nearby Burke Road for $12.06 million that featured 7 underbidders, highlighting the confidence investors have in Camberwell and the inner-east.

The Toorak Road property is close to local icon Leo’s Supermarket and is within an active and highly accessible retail and commercial precinct, serviced by the Route 75 tram, both Hartwell and Burwood train stations and the Anniversary Trail nearby, while Toorak Road offers easy access to Camberwell Junction and major arterials including the Monash Freeway/CityLink.

Bourke said investors, owner occupiers and value-add players have sharpened their focus on inner suburban assets as the CBD office market remains remarkably tight.

“The inner-east’s population growth, accessibility and quality lifestyle amenity has attracted the market’s attention, with strong transaction results and tenant demand witnessed in Camberwell, Kew and Hawthorn in recent times,” Bourke said.

“Accessibility and lifestyle amenity have become key drivers for owner occupiers and businesses looking for new locations, and savvy investors are looking for opportunities that present solid future growth prospects.”

Bourke said Fitzroys’ successful sales campaign of a prominent Bay Street, Port Melbourne building displayed the strong appetite of owner occupiers and value-add players for quality office properties beyond the CBD. The 226 Bay Street property sold vacant for $3.705 million last month at a fiercely contested auction.

“With interest rates at historic lows and rental rates for quality office space still on the increase, a growing number of tenants are finding it more financially viable to owner occupy rather than lease,” he said.

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 2020 Fitzroys.