Weekly Wrap

Fitzroys Weekly Wrap - 10th July 2020

Posted on 10th July 2020

000 Retail 05

526 La Trobe Street, Melbourne
A local owner occupier bought the 549sqm strata property with ground floor retail and office space on level 1 for $3.55 million. The deal also includes the rooftop, allowing for income-generating signage opportunities. Current return is $126,473pa.

115 Mentone Parade, Mentone
The former Westpac branch premises sold for about $2.1 million to a local GP for their new clinic. Westpac’s lease for the 495sqm 2-level building runs until December and returns $116,186pa net plus GST.

Shop 2, 40 Hall Street, Moonee Ponds
An interstate investor bought the 145sqm shop for $1.025 million at a 5% yield. It is leased to Bottlemart for 5 years.

515 Hampton Street, Hampton
An investor paid $745,000 for the 125sqm space at a 5.4% yield. It is on the ground floor of a residential development and is leased to a real estate agency for 4 years plus options, returning $40,365pa net.

574 Chapel Street, South Yarra
High-end men’s apparel brand Maatsuyker leased the 65sqm retail space with office and storage above at $60,000pa.

556 North Road, Ormond
Aea Studio and The Lash Squad teamed up to lease 103sqm for a new concept space, signing a 2-year deal at $25,000pa.

21 Studley Street, Abbotsford
A florist leased the 105sqm space for 3 years at $34,000pa.

000 Offices 05

G2, 79 Manningham Road, Bulleen
A private investor bought the 149sqm office for $870,000, on a 5.5% yield.

Levels 2 & 3, 29-31 Izett Street, Prahran

Financial services company Money Lab signed a 6-year lease over 650sqm at about $250,000pa. The converted warehouse building has an open-air terrace and features a red outdoor swimming pool.

617 Malvern Road, Toorak

A psychotherapy and allied services practice leased the 120sqm, open-plan 1st floor space for 2 years at $35,000pa gross.

000Industrial 05

1/27 Carrick Drive, Tullamarine
A local investor bought the 307sqm mechanics workshop for $540,000. Longstanding tenant Allied Collision Specialist Pty Ltd has a 3+3-year lease from November 2018 that returns $28,089pa net plus outgoings and GST.

12 Keith Campbell Court, Scoresby
The Oven Repair man leased the 1,031sqm office and warehouse building for 5+5+5 years at $109/sqm net. It is on a 1,501sqm site with 13 parking spaces.

000 Development 05

65S Evans Road, Cranbourne West
Developer 888 Property Group sold the 1.32ha corner parcel, with approval for a mixed-use project, to a private investor for $5 million.

000 Talking Points 05

Food and Beverage Operators Cater for Delivery Demand
Food and beverage operators are showing a greater appetite for retail spaces allowing them to cater for the increased home delivery demand that has been fast-tracked recently.

In the latest deal, Fitzroys agents James Lockwood and Mark Talbot negotiated the 5-year lease for the 100sqm space at 198 Glenferrie Road, Malvern to Pizza 888 at $540/sqm. The deal represents Pizza 888 opening its 5th store.

Lockwood said the space will serve Pizza 888’s takeaway concept with minimal seating, demonstrating the move in the hospitality sector from operators with large dining areas towards more agile spaces.

He said more operators are opting for smaller spaces that can offer quick meals or are more conducive to the growing use of delivery services such as UberEats and Deliveroo, particularly during the recent COVID lockdown.

“People want to be served quickly and more operators are looking to meet and best these expectations in recent months. Smaller spaces allow operators to maintain a presence in the market without necessarily having to commit to extensive fit-outs or higher rents for larger spaces.”

Lockwood said enquiry from the food and beverage sector is bouncing back as operators seek opportunities to adapt to the changing environment.

“Competition for spaces has increased, and this deal was negotiated above market rates.”

Pizza 888 has existing sites spread across Melbourne, in Altona, Docklands, Balwyn and Cranbourne. Talbot said Glenferrie Road, Malvern presented an ideal location for the business’s next site, and had recently attracted numerous hospitality operators.

“Malvern and the surrounding suburbs offer an established and affluent catchment that is one of the most enviable in Melbourne,” he said.

The Glenferrie Road shopping strip has also seen a new Italian restaurant lease 99 Glenferrie Road, and ice creamery ScoopyDoo Gelato open up at 225 Glenferrie Road.

Fitzroys has secured 67 leasing deals since the State of Emergency was declared by the Victorian Government in March.

Final Site of West Melbourne Complex Sells
Probuild founder Phil Mehrten and developers Ozzie Kheir and Frank Palazzo have divested the final of the 3 buildings that formed the Sands & McDougall complex in West Melbourne.

The last property, 371-383 Spencer Street, is a 3-level office building with 80% vacancy and sold to a private Melbourne-based investor for $6.8 million.

Planning permits were obtained last year for a 23-level, 190-room hotel and office complex for the combined site, which also comprises the Sands & McDougall building at 355-369 Spencer Street and the warehouse site at 102-108 Jeffcott Street.

The former Sands & McDougall manufactory on Spencer Street sold for $38.5 million to Avari Capital Partners. They will refurbish and lease out the heritage-listed 6-level, 7,363sqm building. Most recently used as offices, it was the long-term home of the printing and publishing firm known for its annual Melbourne Directory that ran from 1862 until 1974.

The vacant Jeffcott Street portion of the site has a 2-storey circa-1914 brick warehouse on 920sqm and sold to Blue Earth Group developer Michael Dib for $9.5 million. It is likely to be used for a high-density apartment project.

The vendors obtained the 3 properties in 2015 for $38.8 million.

Melbourne CBD Tower Sells for $145m
Singapore-based investors TE Capital Partners and Roxy-Pacific Holdings have partnered up to buy the 21-storey 350 Queen Street office building in Melbourne’s CBD for $145 million.

Built in the 1980s, the B-grade 21,914sqm tower has a 4-star NABERS energy rating. It is 95% leased with an average lease expiry of 4 years and sold at a 4.8% initial yield.

The new owners plan a 12-month refurbishment of the tower.

Dexus Industrial Fund Buys Ford Facility
Dexus Australian Logistics Trust has bought Ford’s future automotive parts distribution centre in the Merrifield Business Park, in Mickleham, as part of a $173.5 million acquisition that also included a Sydney cold storage facility.

Ford signed a 10-year lease for the 51,480sqm warehouse facility with the vendors, private developers MAB Corp and GPC, just before the sale. The warehouse will be constructed on an 8.7ha site and have a 14.6m clearance height to enable parts storage for current and future generation cars.

Dulux, D’Orsogna and Steritech have also made pre-commitments within the 415-hectare business park.

The Dexus Australian Logistics Trust is a joint venture between Dexus and Singapore’s sovereign wealth fund, GIC.

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.