Weekly Wrap

Fitzroys Weekly Wrap - 21st August 2020

Posted on 21st August 2020

000 Retail 05

1146-1148 North Road, Oakleigh South
The 260sqm Direct Chemist Warehouse premises sold for $1.851 million at a 4.08% yield. It has a 10+5+5-year lease from April 2018 returning $75,645pa plus outgoings and GST, and includes 10 individually-titled on-site parking spaces.

137 A’Beckett Street, Melbourne
Chinese restaurant Nambawan Hot Pot & Grill leased the 500sqm space, at the base of the EQ Tower, for 10 years at $410,000pa.

651 Rathdowne Street, Carlton North
Vietnamese restaurant Minh Minh Saigon leased the 300sqm shop for 5 years plus options at $72,000pa net. It will be the operator’s 3rd Melbourne location.

Shops 1 & 2, 478 Chapel Street, South Yarra
Best Nails Ever leased the 91sqm space for 2+2 years at $70,000pa.

000 Offices 05

23 Coromandel Place, Melbourne
An owner occupier with office plans bought the converted warehouse for $6.9 million. Overlooking the Kelvin Club, the 457sqm, 2-storey building on a 220sqm site was converted to office use in the early 1990s by the 4 vendors.

Suite 2, 242 Toorak Road, South Yarra
The vacant 50sqm strata office sold for $280,000.

333 Queen Street, Melbourne
Law firm Haines and Polites leased the 275sqm fitted-out suite for 3 years plus options at $500/sqm gross.

000Industrial 05

131-135 Dover Street, Cremorne
An owner occupier paid $4.175 million for the 2-level, 652sqm office and warehouse.

1 Hewitt Street, Cheltenham
The vacant 418sqm brick warehouse building on a 618sqm site sold or $965,000.

1/12 Macro Court, Rowville
An owner occupier bought the office and warehouse unit for $601,000.

5 Everaise Street, Laverton North
A crane company leased the 641sqm office and warehouse on a 2,366sqm site for 3 years at $150/sqm.

26 Cleeland Road, Oakleigh South
Suppliers, manufacturers and fabricators of engineering and industrial plastics, Plasmac leased the 730sqm office and warehouse for 3+3 year $62,500pa net.

000 Development 05

590-596 Glen Huntly Road, Elsternwick
Zoned Commercial 1, the 806sqm site sold for $4.2 million with approval for a 5-level mixed-use development comprising 20 apartments and 3 retail spaces. Existing improvements include a 1,200sqm 2-level former clothing factory building.

000 Talking Points 05

Food and Beverage Operators Seek Ready-To-Go Spaces
Food and beverage operators are showing a greater appetite for retail spaces that allow them to readily take advantage of the increased takeaway and home delivery demand fast-tracked in recent months.

Smaller retail spaces across Melbourne are being snapped up by food and beverage operators adapting to changes in the hospitality sector, according to Fitzroys, with a particular attraction to those already fitted out.

Fitzroys has secured 72 leases since the State of Emergency was declared, including 45 retail deals. Fitzroys Associate Director, James Lockwood said 48% of these had been to hospitality tenants, and almost all had taken place throughout Melbourne’s famous shopping strips.

“This is quite amazing considering the restrictions have affected a number of cafés and restaurants,” he said. Coming into this year, food and beverage operators accounted for around 29% of tenants throughout the retail strips, according to Fitzroys research.

Lockwood said more operators are opting for smaller spaces that can offer quick meals and are more conducive to takeaway and delivery service.

“Use of delivery services such as UberEats and Deliveroo have been on an upward trajectory for some time, and this has been fast-tracked during the COVID lockdown.”

Lockwood said enquiry from the food and beverage sector is bouncing back as operators actively seek the emerging opportunities to adapt to the changing environment a capture existing and new markets.

He said properties with existing kitchen infrastructure are moving quickly.

“Smaller, fitted-out 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 the focus on leases throughout Melbourne’s shopping strips had been further spurred by more people working from home and shopping locally.

“There is the possibility that people will be working from home more often in the future. People have been reconnecting with

their local communities, and at the centre of those are Melbourne’s shopping strips. Confidence in the future of the strips has returned and most leases are being struck on extended terms.”

Lockwood and Fitzroys colleague Mark Talbot recently negotiated the 5-year lease for a 100sqm space at 198 Glenferrie Road, Malvern to Pizza 888 at $54,000pa. The deal represents Pizza 888’s 5th store, which will serve the business’s takeaway concept with minimal seating.

Also among the latest deals is a Pakistani restaurant based in Fawkner that is also expanding to a new catchment, moving quickly to lease the fitted 48sqm space at 142 Rathdowne Street, Carlton. Fitzroys’ Ervin Niyaz negotiated the long-term 6+5-year option at $500/sqm. He said a neighbouring business serving similar cuisine had relocated, and there was a gap in the market the new tenant identified.

On popular Glenferrie Road, Hawthorn, Fitzroys has just secured 2 new leases to hospitality operators at small fitted-out spaces. Tom Fisher leased a 35sqm space within the Lido Cinemas complex at 679 Glenferrie Road for 3+3 years to another expanding business, The Cookie Box, which will follow its maiden store in Windsor with a super-prime location.

Rents in the complex can be circa $1,300/sqm depending on size and position. A short distance away, at 642 Glenferrie Road, Fisher also secured 99 Pancakes for a 4+4- year lease 50sqm corner space at $42,000pa net to serve desserts and sweets such as pancakes and profiteroles for dine-in and takeaway.

Niyaz has also leased a 300sqm warehouse-style space with an existing commercial kitchen and fit-out at 12 Hinkins Street, Moonee Ponds at $44,000pa on a secure 5+5+5-year deal. New tenant, New York Pizza Department Pty Ltd, is operated by an experienced tenant who has owned a pizza business in Thornbury, amongst other ventures in the north and western suburbs.

Meanwhile, Lewis Waddell of Fitzroys has leased a fitted restaurant space at 151 Commercial Road, South Yarra space to a Mediterranean eatery for $55,000pa plus outgoings and GST, which will have an emphasis on its takeaway options.

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.