Weekly Wrap

Fitzroys Weekly Wrap - 20th November 2020

Posted on 20th November 2020

77-89 A’Beckett Street, Melbourne
A strata office sold within the Empire tower for $4.5 million to an investor associated with prospective tenant, the Australian Design College. The 367-apartment tower was developed by Mammoth in 2017.

Suite 17, 663 Victoria Street, Abbotsford
An owner occupier bought the 280sqm top floor office, within a converted warehouse, for $1.3 million.

73 Kooyong Road, Caulfield North
Wellmed sub-leased the 355sqm space across 2 floors from the Australasian Movement Disorder and Pain Surgery Clinic for 3 years, at just under $300/sqm.

677 Springvale Road, Mulgrave
CPB Contractors leased 2,292sqm, previously used by Optus, within Integrated Logistics Partners’ Herman Technology Park for 2 years at around $200/sqm.

410 Toorak Road, Toorak
A luxury home developer bought the 650sqm corner site close to Toorak Village for $5.1 million. Zoned General Residential 1, it has a 43m frontage to Tintern Avenue.

613-617 Bridge Road, Richmond
Offered for the first time in 70 years, the 648sqm triple-fronted site sold for $5.575 million. Zoned Commercial 1, it has a 710sqm building leased to Perini Tiles and returns $154,999pa plus outgoings and GST.

334 Malvern Road, Prahran
A local investor bought the vacant 133sqm 2-storey building for $1.45 million. It is on a 120sqm corner site between Chapel Street and Hawksburn Village.

18 Puckle Street, Moonee Ponds
A Malaysia-based buyer bought the vacant, 140sqm 2-level shop for around $1.04 million.

65 Swan Street, Richmond
Vietnamese fusion restaurant Hochi Mama is opening a new venue, signing a 5+5-year lease over the 195sqm space at $155,000pa gross.

15-17 Metropolitan Avenue, Nunawading
An owner occupier paid $2.31 million for the 706sqm single-level building on a 1,105sqm site opposite Bunnings.

10 Market Drive, Bayswater
The 1,910sqm office and warehouse was leased for 3 years at $200,130pa.

169-171 Stud Road, Wantirna South
A Hong Kong-based investor bought the 1,630sqm medical centre, spread across 2 buildings of 4-storeys each, for $5 million at a 4.4% yield. Among the existing tenants are Eastern Dental Group, Knox Health & Sports Clinic, Wantirna Osteopathy, Action Rehab and Melbourne Lymphedema.

Lift Shaft the Newest Addition to Melbourne’s Laneway Scene
An unused lift shaft is the latest addition to the Melbourne CBD’s world-famous laneway hospitality culture.

And at just 7sqm, it is also one of its smallest.

The space at Equitable Place, at the rear of 107 Elizabeth Street, has been leased to Mörk Chocolate Brew House in a deal negotiated by Fitzroys Associate Director, James Lockwood. The 3+3+3+3-year deal was struck at $17,000pa gross on behalf of a private investor.

Mörk will bring its specialty hot chocolate offering as a point of difference to the city, Lockwood said. They are currently in North Melbourne and their artisan, single-origin hot chocolate has developed a cult following.

Lockwood said the deal was the result of advice from Fitzroys to the property’s owners to cut out an opening window onto Equitable Place from the unused lift shaft at the back of the building.

“This was basically a value-add play to the property by adding more income,” he said.

“Hospitality operators have witnessed heightened demand for takeaway services throughout the CBD and across Melbourne during the COVID period. This extends from restaurant meals, casual lunches, through to coffee and liquor.

“As a result, demand has grown for smaller spaces with an emphases on takeaway services. In this case, some creativity was required to bring that opportunity to life.”

Lockwood said the tenant was not alone in looking for hole-in-the-wall opportunities.

“We actually had 5 offers on the property, highlighting the amount of tenants looking to secure a space like this.

“It’s likely there will be more types of these deals going forward.”

The deal is the 3rd lease to a hospitality operator in several weeks in the popular laneway. Lockwood recently leased 12 Equitable Place to an Asian restaurant, and 10/26 Equitable Place to a café.

“Hospitality operators have been keenly anticipating the return of hustle and bustle to the CBD. Enquiry for suitable spaces has been growing steadily as Melbourne moved closer to reopening.”

“Hospitality operators willing to commit to these deals is a clear vote of confidence in Melbourne’s CBD, and of the contribution its iconic laneways make towards the city’s global reputation as a cultural and lifestyle hotspot ,” Lockwood said.

The Asian restaurant moving into 12 Equitable Place also has an existing presence in North Melbourne and is now pushing into the CBD, while the operator of the café going into 10/26 Equitable Place has run another café in the CBD with another team previously, and is looking to venture out onto his own.

“All 3 of these properties have been leased to tenants with previous ventures, and each has shown an appreciation for the unique opportunities presented to operators in having a CBD laneway location,” Lockwood said.

Other city laneway leases recently secured have included Fitzroys’ 5-year lease of Shop 3, 234 Flinders Lane to FR International, part of FRONTROW Enterprise Philippines, Inc. The 39sqm space within the historic Manchester House fronts Manchester Lane. Across Flinders Lane, Freechoice Tobacconist has leased a 38sqm space at Bible House, on the corner of Scott Alley.

Developer Buys Another City-Fringe Site
Pallas Group’s development arm, Fortis has bought a 1,298sqm Richmond corner site on which it will build an apartment, retail and office building with an end value of $90 million.

Fortis paid around $19 million for the triple-fronted 8 Brighton Street site, located off the intersection of Church and Swan Streets. The 7,000sqm development will comprise 9 levels of commercial and residential space above ground-floor retail.

Fortis recently paid $6.9 million for a South Melbourne site for a new 6-level office development, and is planning a $300 million mixed-use development on a 5,500sqm Smith Street site in Clifton Hill, directly opposite Development Victoria’s Fitzroy Gasworks project.

New Vaccine Hub to be Built in Melbourne
CSL subsidiary Seqirus will spend $800 million building a new 118,000sqm vaccine production facility at Tullamarine airport, after striking a deal with the federal government.

The federal government will commit $1 billion over 10 years towards underwriting construction of the facility and purchasing influenza vaccines it produces, as well as antivenins used to treat spider and snake bites.

The facility would also present a chance for Australia to develop and manufacture its own vaccines that might be required should any future pandemics arise, without having to bid for vaccines produced overseas.

Seqirus’ current production facility in Parkville has become outdated and is unable to be modernised to handle cell-based technology and production demands.

The company’s current deal with the government expires in 2024/25. Construction of the new Tullamarine plant will begin next year, and is scheduled to be operational by 2026.

MAB Plans Industrial Estate Next to Avalon
MAB Corporation is planning to develop a $3.3 billion industrial estate on a 780ha former salt production site next to Avalon Airport.

The 40-year project would create a transport, logistics and wholesale trade-oriented hub and support about 18,000 jobs.

MAB entered into an agreement with the site’s owner, ASX-listed stock feed and nutrition business Ridley Corporation, 3 years ago to take control of the land. It will lodge a rezoning request for agricultural-zoned site and aims for business operations to begin in 2023.

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.