Weekly Wrap

Fitzroys Weekly Wrap - 11th Dec 2020

Posted on 11th December 2020

000 Offices 05

255 Coventry Street, South Melbourne
A law firm bought the 211sqm Victorian-era building for $2.55 million with long-term plans to owner occupy. It is currently leased to Hoxton Hair Salon until December 2021 with a 5-year option, returning $106,966pa net.

Level 3, 68 Clarke Street, South Melbourne
Nasdaq-listed video game publisher Activision Blizzard leased a 1,433sqm whole-floor office for 5 years, in the mid to high-$500/sqm range. The company has produced Call of Duty and Crash Bandicoot, and is moving from a 100sqm office on St Kilda Road to house more than 100 staff at the new studio from Japan, Los Angeles and the UK. The space is within the Hickory’s new Market Lane project.

Suite 4, 218-224 Upper Heidelberg Road, Ivanhoe
A psychology practice moving out of a work-from-home arrangement leased the 90sqm office for 3 years, with an option, at $25,000pa.

1 Nexus Court, Mulgrave
Seafood company KB Food Co leased the 1,000 sqm ground-floor office within Salta Properties' Nexus Business Park for 8 years at $300,000pa.

000 Development 05

20 and 22 Douglas Street, Toorak
Geelong Grammar sold the neighbouring properties to local developer Fadil Sadikay for a combined $10.3 million. Number 20 has a 3-bedroom, 2-bathroom home on a 536sqm site and sold in July for $3.4 million, while number 22 has a 5-bedroom house on 870sqm and sold for $6.9 million. Sadikay Group is planning a low-rise apartment project on the combined property.

15 Dudley Street, Caulfield East
A Melbourne-based developer paid $2.22 million for the 533sqm site, which is approved for student accommodation use and is close to Monash University.

000 Retail 05

428 Whitehorse Road, Nunawading
An investor bought the vacant 445sqm showroom within the “Mega Mile” precinct for $2.805 million. Zoned Commercial 2, it has a 16.85m frontage and a 1st floor office.

473 Victoria Street, Abbotsford
A local buyer paid $1.7 million for the vacant 280sqm building, formerly home to Genghis Khan House of Treasures, which is on a 297sqm site zoned Commercial 1.

709 Centre Road, Bentleigh East
The 180sqm shop and dwelling on a 150sqm site sold for $926,000 at a 4.4% yield. A nail salon occupies the ground floor retail space, with a residential tenant in the 2-bedroom apartment above.

10 Market Street, Nunawading
The 96sqm shop sold for $420,000 at a 5% yield. Long-term tenant Capricorn Tattoo has 2 years remaining on a 3-year lease that returns $21,775pa.

178 Carlisle Street, St Kilda
A tattoo studio leased the 80sqm space at $26,000pa plus outgoings and GST for 5 years. It will be their 3rd studio following Carlton Tattoo Co and Vintique Tattoo Studio in Mordialloc.

168 Exhibition Street, Melbourne
Hair stylists Heavens Salon leased the 105sqm space for 6 years at $125,000pa. FGI Group is the landlord.

000Industrial 05

40 Decco Drive, Campbellfield
Centennial Industrial & Logistics bought the vacant 35,719sqm site for $13.297 million. Existing improvements include a 9,361sqm distribution centre. The fund’s development plans for the site have an estimated value of around $30 million.

22/260 Wickham Road, Highett
A family-owned local business bought the 1,000sqm office and warehouse with 15 on-site parking spaces for $1.88 million.

13-15 Endeavour Way, Braeside
Skyline Landscapes leased the 2,199sqm warehouse at $95/sqm net.

21-23 Endeavour Way, Braeside
Packaging supplier eBPak leased the 1,067sqm property at $93/sqm net.

000 Specialised 05

533 Blackburn Road, Mount Waverley
A doctor paid $7.2 million for the vacant 1,000sqm building with plans to open a new medical clinic. Formerly an ANZ branch, the building has since been converted into a medical centre and is on a 4,500sqm site with 57 parking spaces. It is permitted for 19 health practitioners.

000 Talking Points 05

Generational Melbourne Strip Retail Investment Opportunity Sells for $5.1m
The enduring attraction of well-located, securely-leased assets in Melbourne’s shopping strips has again been demonstrated, with a freehold leased to the Commonwealth Bank of Australia selling for more than $5.1 million after a competitive Expressions of Interest campaign.

Chris Kombi and Chris James of Fitzroys sold 125-127 Upper Heidelberg Road, Ivanhoe to a local investor on a yield of 3.44% on the passing income.

The historic campaign attracted multiple offers and marked the first time the property changed hands in more than 50 years.

“Prime sites in Melbourne’s established shopping strips continue to be highly sought-after. Properties in this section Upper Heidelberg Road are rarely offered to the market, and national and international investors and land bankers recognised this was a genuine generational opportunity,” Kombi said.

“Interest rates are at an historic low and the share market continues to be volatile. Investors are seeking income-producing assets with secure leases to a blue-chip tenant, primely located within an established and affluent catchments.”

The dual-fronted property comprises a 350sqm 2-storey brick building, leased to CBA on a 7-year lease plus options over the 230sqm ground-floor retail space. The CBA moved from within the strip 3 years ago to the property, combining the 2 existing shops in the building and completely renovating the premises to suit its modern open-plan layout.

Earlier this year, Fitzroys sold the Burke Road, Camberwell home of the Commonwealth Bank for $12.06 million, at a 3.5% yield.

Zoned Commercial 1, the land-rich Upper Heidelberg Road property encompasses a large 755sqm site with a prominent street frontage of 10.4m to Upper Heidelberg Road, along with rear frontage to a right of way and Ivanhoe Plaza car park.

Situated adjacent to a busy pedestrian crossing, the property is surrounded by national tenants and Ivanhoe Plaza, anchored by Woolworths and Liquorland, with constant pedestrian traffic from a prized established and affluent demographic.

James said more people working from home and shopping locally is a trend that is likely to persist in the long-term.

“People have been reconnecting with their local communities. At the centre of those are Melbourne’s shopping strips,” he said.

“Upper Heidelberg Road, Ivanhoe is considered one of Melbourne's safest retail precincts for commercial property investors, with an excellent track record of very low vacancy rates.”

Fitzroys’ Walk the Strip report series has consistently recorded Upper Heidelberg Road among the tightest vacancy rates of Melbourne’s shopping strips over recent years.

Primewest Spends $70m on Southbank Shopping Centre
Fund manager Primewest has bought the Woolworths-anchored shopping centre within Malaysian developer OSK’s Melbourne Square project in Southbank for $70 million.

The centre has a 2-level Woolworths supermarket, BWS liquor store, 5 specialty stores and an 87-place Think Childcare centre. It sold at a 4.73% yield with a weighted average lease expiry of nearly 14 years. Woolworths has a 15-year lease, and Think Childcare a 20-year agreement.

Primewest bought the asset for its Daily Needs Trust, which seeks supermarket-anchored neighbourhood shopping centres with a non-discretionary retail or service-based focus.

The mixed-use $2.8 billion Melbourne Square precinct covers 2.2ha on a former car park site at 93-119 Kavanagh Street. It will ultimately comprise 6 towers, including residential towers of 69 and 54 levels that have just topped out, as well as a 29-floor office tower and a 600-room Hilton hotel.

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.