614-616 Burke Road, Camberwell
The ANZ Bank branch site sold for a reported figure of more than $16.5 million. Zoned Commercial 1, the 686sqm site has a 778sqm building that has City Pets and Second Avenue Hair & Beauty as rear tenants, and returns a combined $782,872pa net plus GST.
519 Warrigal Road, Ashwood
The renovated 2-storey, 160sqm shop and dwelling on a 209sqm site sold for $1 million, with a monthly lease to longstanding tenant Cartridge World returning $25,116pa. The residency above is vacant.
35 Victoria Avenue, Albert Park
A local investor bought the 163sqm Master Dry Cleaners building for $1.8 million. The property has a 10-year lease returning $80,744pa net plus outgoings and GST.
1/190 Belmore Road, Balwyn
The 138sqm building sold for $1.2 million. It has been occupied by a compounding pharmacy for more than 10 years and is leased until April 2022 with a 5-year option, returning $46,451pa plus outgoings and GST.
15 Saint Mangos Lane, Docklands
The vacant 60sqm corner space in the New Quay precinct, formerly used as a hair salon, sold for $250,000.
683 Centre Road, Bentleigh
A graphic design studio signed a 2-year lease over the 90sqm space at $311/sqm net.
470 Collins Street, Melbourne
Suleman Group signed 3 more tenants for its office tower. MB Insurance leased 149sqm on level 9 for 3 years, GIEC Global took 36.7sqm on level 8 for 2 years, and Cherub Consulting expanded within the building, leasing 63.6sqm on level 2. Rents were $390-$490/sqm net.
123-127 Martin Street, Brighton
A local IT company leased the 200sqm ground floor office for 4 years at $76,000pa net.
22 Business Park Drive, Ravenhall
Dexus bought AS Colour’s facility for around $9 million, and at the same time signed AS Colour to a long-term lease for an 18,800sqm facility at 12B Felstead Drive within its Foundation estate in Truganina.
Unit 2, 22 Furlong Street, Cranbourne West
GYM Plus signed a 3+3-year lease for the 1,114sqm facility, triple the size of its previous space, at $92,000pa, in response to increased online sales of fitness equipment.
7 Richards Court, Keilor Park
The 1,025sqm property was leased at $122/sqm.
43 Nepean Highway, Aspendale
The 881sqm site with direct beach access sold to a local buyer for $1.8 million. The property has a 2-bedroom home and was offered for the first time in 50 years.
St Kilda Road Confidence Leads to Landmark Value-Add Play
Local and offshore investors continue to demonstrate confidence in Melbourne’s St Kilda Road, attracted to the high-performing office market’s strong fundamentals and its prospects beyond the current environment.
In the latest deal, Fitzroys Director Paul Burns sold 436 St Kilda Road for $62.15 million to Shakespeare Property Group, the property arm of boutique investment manager Prime Value Asset Management.
Burns brokered the off-market transaction on behalf of ASX-listed Flight Centre Travel Group, which has just successfully completed a $700 million capital raising. Flight Centre Travel Group has committed to lease back 75% of 436 St Kilda Road, having been long-term occupants and buying the property in 2008.
Numerous parties made offers to buy the asset. Ultimately, the deal was negotiated in an abbreviated timeframe and subject to a very short due diligence.
The 11-storey glass tower has a net lettable area of 7,506sqm and is on a 2,317sqm site opposite Fawkner Park. Five tenants occupy the fully-leased building, including Flight Centre and soccer’s state governing body Football Victoria.
Burns said that whilst in some areas of the market COVID-19 has brought on a “wait and see” approach amongst buyers, securely-leased investments remain highly sought after as cashed-up investors are more motivated to set themselves in bricks and mortar with income.
He said the strength of the result reflected the confidence investors have in the St Kilda Road market.
“Buyers taking a long-term view beyond the COVID-19 environment recognise St Kilda Road’s fundamentals have it well-placed to maintain its strong performance of recent years.”
He said investors and developers have been favouring office use along St Kilda Road after a period in which multiple properties were converted to residential, as tenants are seeking accessible city fringe locations with quality lifestyle amenity in greater numbers.
Burns said these factors have driven vacancy rates down and put upwards pressure on rents, and subsequent demand for St Kilda Road assets has been reflected in ongoing value increases over recent years.
“Investors have been actively pursuing St Kilda Road buildings with value-add and
repositioning potential, looking to take advantage of Melburnians’ increasing preference to live, work and play across the inner city,” Burns said.
“My understanding is that SPG see this as an opportunity to buy a strategically located office property, in this case located a short distance from the future Anzac Metro station that will further enhance accessibility to St Kilda Road.
“The dearth of investment opportunities in this precinct encouraged the buyer to act quickly, and they will now set about adding value to the property and deliver strong returns to their investors.”
Anzac station is part of the $11 billion Metro Tunnel project and is due to open by 2025, complementing multiple tram routes at the doorstep of 436 St Kilda Road and at Domain Interchange close by. The building is also meters from Albert Park Lake and the Royal Botanic Gardens.
“In a market with a shortage of available quality stock, pent-up demand means a number of buyers are ready to pounce when opportunities arise,” Burns said.
“The depth of buyer interest from domestic and offshore parties, and the feedback received during the campaign demonstrated Melbourne has retained its safe-haven investment status, even throughout the uncertain climate.”
Charter Hall Secures Coles and Bridgestone for Truganina Estate
Charter Hall Prime Industrial Fund has pre-leased a combined 55,000 sqm of distribution facilities within its 58ha Midwest Logistics Hub in Truganina to Coles and Bridgestone.
Coles will use the 30,000sqm as a highly automated customer fulfilment centre to meet growing demand for online food and grocery shopping. The supermarket has also leased another 30,000sqm facility in Sydney for the same purposes.
Bridgestone committed to a 25,000 sqm warehouse and commercial store facility for 10 years, which will accommodate its commercial business including retail, administration and service centres for trucks and cars, as well as storage and distribution warehouse operations for its tyres.
Logistics group Toll has signed up for 44,000sqm at the industrial estate, as well as Japanese fashion house Uniqlo, for a 46,000sqm warehouse.
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.