Weekly Wrap

FItzroys Weekly Wrap - 16th October 2020

Posted on 16th October 2020

000 Retail 05

Shops 1, 2 and 3, 299 Harvest Home Road, Epping
Investors picked up the 3 respective strata-titled shops for a combined $2.2 million, at a 5.4% average yield. They are leased to Dr Skin Laser & Cosmetic Clinic for 5+5-years, Aurora Laundry on a 7+5+5-year term, and Oregano’s Bakehouse & Café, on a 5+5+5-year deal. The buyers included a Hong Kong-based investor who made the purchase sight unseen.

779 Glenferrie Road, Hawthorn
The Pizza Project Group will open a new restaurant at the 2-level 185sqm space including upstairs dining, signing a 6-year lease plus options at $52,500pa net.

30 Chatham Street, Prahran
New café Head Honcho signed leased the 56sqm within Peregrine Projects’ mixed-use development The Luxton, at $30,000pa.

Shop 4, 268 Balcombe Road, Beaumaris
Hair salon Coco Colour Bar leased the 53sqm shop on a 1-year lease plus options at a commencing rent of $22,000pa net.

000 Offices 05

36 Lakeview Drive, Scoresby
Arlec leased the an entire campus-style 8,500sqm office building within the Caribbean Park Estate, on a 10-year lease at around $300/sqm. The building will be the 6th completed at the 180ha estate, owned and developed by the Spooner family since the 1940s. All of the nearly-60,000sqm of office space in the estate is now leased.

818 Whitehorse Road, Box Hill
Developer Poly Global leased the 284sqm office for 3 years at $380/sqm net. It will use the ground floor space as a display suite for a mixed-use project across the road.

000Industrial 05

9-11 Turbo Drive, Bayswater
After almost 30 years of ownership by the same family, the vacant 2,200sqm office and warehouse sold for $3.15 million.

Unit 6, 71 Elgar Road, Derrimut
The vacant 716sqm corner showroom, office and warehouse sold for more than $1 million.

2 Mayer Place, Truganina
Facilities management provider All Industries Solutions signed a 5-year lease for the 1,666sqm office and warehouse before its practical completion at $150,000pa. The owner is developer Blackwood Downs Building Services.

000 Development 05

1 & 9 Biodiversity Boulevard and 46 & 54 McKellar Way, Epping
The combined 3.61ha site sold to a developer Freestyle Property Holdings for $11 million, 42% more than what it last sold for 4 years ago. The site has 3 street frontages and comprises 4 lots that were purchased by Patterson Cheney in 2016.

246-250 Highbury Road, Mount Waverley
A local builder bought the 2,310sqm site over 3 titles for $3,628,880. It has a permit for 10 townhouses.

730B Centre Road, Bentleigh East
Zoned Mixed Use 1, a local developer bought the 581sqm site near the intersection of East Boundary Road for $950,000. It has a 135sqm brick veneer building.

000 Specialised 05

1 Greenvale Gardens Boulevard, Greenvale
A local child care centre developer bought the 3,016sqm site for $2.2 million. It has a permit for a child care centre with 190 places and is located within the Greenvale West Precinct Structure Plan.

000 Talking Points 05

Laneway Leases Show CBD Confidence
Hospitality operators and retailers anticipating the return of hustle and bustle to the Melbourne CBD have committed to long-term leases within city laneways Equitable Place and Manchester Lane.

Fitzroys’ James Lockwood negotiated the deals at 12 Equitable Place and 10/26 Equitable Place, both on secure 5+5-year terms.

“These leases demonstrate the faith operators have in the future of Melbourne’s CBD, and the significant role its iconic laneways will continue play in city life,” Lockwood said.

He said the deals continued the trend of properties with existing kitchen infrastructure being particularly attractive to hospitality tenants, which has been consistent throughout the COVID period.

At 12 Equitable Place, an Asian restaurant leased the 110sqm space at $95,000 per annum. The tenant has an existing restaurant in North Melbourne and is now pushing into the CBD. Lockwood said it is noteworthy the business has made its first expansion move during the COVID-19 period.

The 45sqm space at 10/26 Equitable Place was leased to a café at $45,000 per annum.

Lockwood said the operator has run another café previously in the CBD with another team and now looking to venture out onto his own.

“Both properties were leased to tenants with previous venues, and an understanding of the unique opportunities presented to operators in having a CBD laneway location,” Lockwood said.

“Spaces with kitchen fit-outs allow hospitality operators to readily establish and expand their presence in the market, without having to commit to comprehensive fit-outs.”

Rick Berry of Fitzroys negotiated the 5-year lease of Shop 3, 234 Flinders Lane to international health, beauty and wellness products retailer FR International, part of FRONTROW Enterprise Philippines, Inc.

The 39sqm space within the historic Manchester House was leased at $60,000 per annum, or $1,538 per sqm, plus GST with 4% annual increases, and 1 month rent-free.

“This shop is on the Manchester Lane frontage, and is ideally placed for a tenant like FR International who was seeking an iconic and recognisable location for their first representation in Melbourne,” Berry said.

FRONTROW began its Australian operations in Sydney in July, 2019, and has 90 branches in the Philippines, as well as branches in Dubai, Abu Dhabi, Fujairah, Singapore, London and Hawaii. Among its products are Australian-made health supplements, cosmetics made in Korea, and soaps made in the Philippines.

“A retailer with international experience committing to a secure lease at this time demonstrates the confidence businesses have in Melbourne’s CBD beyond the current environment,” Berry said.

Designed by architects Bates, Peebles & Smart, Manchester House was constructed over 1911 and 1912 on the corner of Flinders Lane and Manchester Lane, and is a pre-eminent example of the many rag-trade warehouses that dominated the area in the first half of the 20th century.

Fitzroys sold a strata portfolio of 2 large office floors and the retail unit within Manchester House to The Theosophical Society.

Manchester House is opposite the corner of Royston Place, which will form part of the entrance of the future Town Hall Station, part of the $11 billion Metro Tunnel project that will reshape the Melbourne CBD.

Other retailers have just taken up space in close proximity to Manchester House. The location is metres from Degraves Street and Centre Place, while Melbourne City Council has just introduced more pedestrian-friendly traffic conditions along Flinders Lane as the CBD moves towards reopening. Across Flinders Lane, Freechoice Tobacconist has leased a 38sqm space at Bible House, on the corner of Scott Alley.

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.