Weekly Wrap

Fitzroys Weekly Wrap - 4th December 2020

Posted on 04th December 2020

000 Offices 05

Level 1, 63 Stead Street, South Melbourne
The 563sqm whole-floor strata office sold for $2.177 million at a 6.5% yield. Multiple tenants return a combined $142,576pa plus outgoings and GST. The property includes 17 undercover parking spaces.

46-50 Regent Street, Richmond
A digital marketing group signed a short-term lease for the 200sqm office at $52,000pa.

000Industrial 05

53-59 Church Street, Abbotsford
A high-net-worth family bought the 2,520sqm site over 3 titles, close to the Yarra River, for $8.3 million. Zoned Industrial 1, it is leased to 3 tenants with short-term leases returning $217,500pa.

Unit 1, 10 Brand Drive, Thomastown
The 450sqm office and warehouse unit sold to an owner occupier for $900,000.

000 Retail 05

125-127 Upper Heidelberg Road, Ivanhoe
Offered for the first time in over 50 years, the 2-level freehold home to the Commonwealth Bank of Australia sold to a local investor for $5.107 million, at a 3.44% passing yield. The dual-fronted property comprises a 350sqm brick building on a 755sqm site zoned Commercial 1. CBA has a 7-year lease plus options over the 230sqm ground-floor retail space.

311, 313 and 315 Harvest Home Road, Epping
The trio of strata-titled shops sold individually to separate investors for a combined $2,700,000, at yields of around 5.4%. 311 Harvest Home Road is leased to 100% Real Estate on a 5+5+5-year term, number 313 to New Star Nails on 7+7-year lease, and number 315 to Cuts 4 All, with a 5+5+5-year term.

54-56 Commercial Road, Prahran
A 412sqm, 2-level New York warehouse-style building on a 230sqm site sold for $2.43 million, at a 4.3% yield. Zoned Residential Growth 1, it has 3 spaces leased to long-term tenants, including a ground-floor gym and 2 apartments upstairs, returning $107,807pa.

Shop 1, 121 Maling Road, Canterbury
A pharmacist leased the 118sqm former bank space with a large vault for 10 years at $55,000pa net. Shop 2 within the building was recently leased to Vienna Patisserie Bakery.

000 Specialised 05

137 Moondarra Drive, Berwick
The Woodleigh Waters Medical Clinic premises sold for $5.05 million, at a 5.8% yield. Tenants include a GP, pathology, dentist and pharmacy, for a combined return of $293,000pa and with a 7.8-year weighted average lease expiry. The 622sqm building is on a 1,952sqm corner site.

000 Talking Points 05

Canadian Group Selects Footscray for $450m Build-to-Rent Project
Canada's Oxford Properties has acquired a site close to Footscray train station on which it will develop $450 million build-to-rent project.

Oxford, the property arm of pension fund OMERS, acquired the 6,916sqm site at 3 McNab Avenue from a private developer that had previously obtained development approval for the property.

The Victorian Government last week announced as part of the state budget that it would halve land tax for build-to-rent developments from 2022, which would apply until 2040.

More than half of the Australia’s build-to-rent project pipeline is in Victoria. This includes Mirvac projects on the Munro site next to Queen Victoria Market, at the former Melbourne Convention Centre site on Spencer Street in the CBD, and in Brunswick; while Lendlease and Salta also have projects planned.

Sites across the western suburbs continue to be picked up by developers for a range of projects. Cadence Group has picked up the 2.07ha industrial site at 36-38 Roberts Street in West Footscray for $10 million with a 2.5-year sale and leaseback to Winnipeg Textiles.

In September, ASX-Listed data centre group NextDC bought the nearby site at 25-27 Indwe Street for $21.8 million from Michael Fox and Robert Costa’s development company CostaFox. The site was previously earmarked for a 150-unit business park.

Cadence also recently bought the 3.8ha Spotswood site formerly home of the Australian Quarantine and Inspection Service, opposite Scienceworks, for around $14 million. After more than 60 years at the property, the AQIS recently moved to a new facility in Mickleham.

Florists, and Melbourne Retail, Springing to Life
Green shoots across Melbourne’s famous retail precincts are beginning to appear as the city emerges out of lockdown, with a florist and plant specialty store expanding into a prominent corner space on Johnston Street, Fitzroy.

Fitzroys Agency Manager, Lewis Waddell leased 154 Johnston Street to Dragonfly Flowers & Designs on a secure 5+5+5-year term at $75,000 per annum plus outgoings and GST.

Waddell acted on behalf of a private investor.

The prominent 240sqm standalone building comprises a ground-floor shop and 1st-floor dwelling, and is on a high-exposure corner site with excellent signage opportunities and on-site parking.

“The eclectic and vibrant nature of Melbourne’s inner-north was the main attraction for Dragonfly Flowers & Designs. This space is within one of Melbourne’s favourite hubs for creative tenants and is in the busy part of Johnston Street, close to the Brunswick Street intersection, offering high exposure to passing vehicles and pedestrians,” Waddell said.

“Enquiry throughout Melbourne’s strips has picked up as Melbourne headed towards its reopening, and businesses are much more willing to take up deals on extended terms as the restrictions are lifted and with promising news of a vaccine in the near future.”

Dragonfly Flowers & Designs is making their 1st expansion from their existing site in Windsor. Waddell said florists and plant stores have performed well during the COVID period, as Melburnians spend more time working from home and invest more time and energy into their work and living spaces.

Waddell recently leased 127 Greville Street, Prahran to an online florist Honeybee and Blossom, whose performance was so strong during the COVID period that it took up a bricks and mortar presence to further enhance their presence in the market.

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.