$6m Deal Inked for New Epson Melbourne Offices
The new Melbourne headquarters of multinational electronics company Epson has sold for $6 million, in a sale that demonstrates the ongoing attraction of commercial real estate for investors in the current economic environment.
Fitzroys Director, Paul Burns negotiated the off-market sale of 90 Camberwell Road, Hawthorn East on behalf of Forza Capital. The sale price reflected a 4.65% yield.
The fully refurbished 630sqm office and showroom building is on an 842sqm site with 14 parking spaces. New tenant Epson Australia Pty Ltd is currently fitting out the premises, and recently signed a 5+5+5-year lease returning $279,000 per annum with 3.75% annual increases.
The property sold at a strong building rate of $9,524/sqm and land rate of $7,125/sqm.
Burns said the property sold as a passive investment to a local buyer.
“The purchaser saw immense upside in the secure terms of the lease to a blue-chip tenant,” he said.
Zoned Commercial 1, the property also offers excellent redevelopment potential for a much higher density development in the future – for either residential or commercial uses.
Burns said investors are continuing to actively source well-located and income-producing assets despite COVID-19.
“There is still strong demand for income-producing assets, particularly given the historically low official cash rate and volatility in the stock market.
“Commercial property is viewed as a stable alternative, and Melbourne’s reputation as an investment safe haven remains a compelling factor for assets such as this.”
The property is in a high-profile, inner-east location, close to the Burke Road and Camberwell Junction retail and commercial precinct, as well as the Glenferrie Road retail and lifestyle strip.
Burns said the inner-east has emerged as one of Melbourne’s most highly regarded locations for investors around Australia and overseas.
“The inner-east’s convenient location and renowned lifestyle amenity has made it apreferred place to live and has become a focus for businesses and tenants.”
Burns said Melbourne’s inner-east and other suburban and metropolitan markets would continue to attract the attention of local and offshore investors alike, as the impact of COVID-19 creates more demand for offices closer to where employees live, thus enhancing their lettability.
“Even if a small percentage of CBD tenants choose to move away from the high density CBD, this will have a big impact on the shallow pool of suburban office stock that is available and is likely to result in upward pressure on rents.
“Financial considerations in the current climate may encourage companies to take up space in the suburbs, which offer lower rents.”
The inner-east has an established catchment that has received strong enquiry for office space in recent months, and medium and high-density projects will continue to see more people living in the catchment.
Fitzroys has recorded a strong uptick in enquiry from a range of tenants looking to move to the growing office markets of Hawthorn, Kew and Camberwell, and strong transaction results have been witnessed in these locations.
ASX-Listed Data Centre Operator Buys West Footscray Business Park
Date centre group NextDC has bought a West Footscray site for $21.8 million from Michael Fox and Robert Costa’s development company CostaFox, in one of multiple larger deals struck across the inner west.
CostaFox had previously planned to build a 150-unit business park at 25-27 Indwe Street.
Also in West Footscray, another Melbourne developer, Cadence Property Group has paid $10 million for the Winnipeg Textiles site at 36 Roberts Road with a leaseback agreement.
Cadence recently bought the 3.8ha former home of the Australian Quarantine and Inspection Service opposite Sciencworks in Spotswood for around $14 million. The AQIS had been at the site since the 1950s and recently moved to a new facility in Mickleham.
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.