Weekly Wrap

Fitzroys Weekly Wrap - 4th May 2018

Posted on 04th May 2018

Retail sale, Shop 2, 19 Izett Street, Prahran
A local investor paid $505,000 – more than $10,100 per sqm – for the boutique retail space, which is located opposite the currently under construction Cato Square urban park development that will transform a car park site into almost 10,000sqm of urban parkland with underground parking. Offered with vacant possession, the shop attracted strong enquiry from investors and owner occupiers looking to take advantage of the location’s future prospects.

Retail Sale, 194 Chapel Street, Prahran
Offered for the first time in more than 50 years, the 247sqm property sold for $1.85 million. The site encompassed a 150sqm building with an 8m frontage and traded with a short-term tenancy.

Retail sale, 157 Carlisle Street, Balaclava
The recently redeveloped building has a ground-floor shop and five first-floor apartments, and sold for the first time in more than 40 years for $5 million to a local buyer, at a 4.4% yield. It has a new 10-year lease to the longstanding retail tenant Hot Bargain, and with the residential tenancies returns a combined $222,937pa.

Retail sale, 622 Main Street, Mordialloc
Local investors traded the two-storey retail building of 220sqm for $2.2 million, at a 3.13% yield. It has two five-year leases bringing a combined $68,860pa net.

Retail sale, Lot 1A and Lot 1B 246 Queen Street, Melbourne
The vacant 195sqm space over two titles sold for $3.15 million to a local purchaser that intends to occupy some or the space and lease out the remainder. It is positioned at the base of the ten-level office building addressed 248-250 Queen Street on the corner of Lonsdale Street.

Retail lease, 98 Bourke Street, Melbourne
Bangkok Terrace will open its second restaurant, following its maiden site on Hawthorn’s Riversdale Road, within the CBD and close to the corner of Exhibition Street after agreeing to a five-year deal with two five-year options at $200,000pa gross.

Retail lease, 445-453 High Street, Northcote
Bottlemart has signed a 10-year deal at $57,000pa over the ground-floor space within the new apartment complex by Pace Development Group.

Office lease, Williams Landing
Developer Cedar Woods has secured the Victorian Government as a tenant for a new purpose-built office building in the western growth suburb. The Government has committed to a 15-year deal with two five-year options over the four-level, A-grade office building of 3,126sqm, which will be in the Williams Landing Town Centre.

Land/development sale, 291 Grange Road & 4 Walsh Street, Ormond
The L-shaped 1,254 sqm site sold to a mainland China group for $3.38 million, with a permit for a project of 23 larger apartments targeted at the owner occupier market. Sold at a land rate of $2,695/sqm and unit rate of $146,956/unit.

Land/development sale, 279-281 St Georges Road, Northcote
Zoned Residential Growth 1, the 1,207sqm corner property sold for $4 million to a local childcare developer, with potential for a development over four levels. It has a 105m triple frontage and is positioned close to Glenvill’s $130 million residential project The Cotery, with 41 apartments and 12 lofts. Sold at a land rate of $3,314/sqm.

Land/development sale, 116 Walpole Street, Kew
The 857sqm residential development site changed hands for $3.3 million with approval for a project with three luxury townhouses, at $1.1 million/unit and land rate of $3,851/sqm.

Industrial lease, 7 Kerr Street, Fitzroy
Offshoot Rentals has leased the modern warehouse building of 408sqm on a five-year deal with a five-year option. The photography and audio-visual equipment supplier will pay $48,000pa net, at $117 per sqm. The space was previously occupied by an earthmoving equipment hire company.

Talking points

Victorian Government makes blockbuster deals with AFL and 7: Victorian Treasurer Tim Pallas revealed this week that the State Government has provided a Docklands waterfront parcel of land, just next to the Bolte Bridge, to the AFL for its new headquarters. It will be leased to the League until 2057, which is when its agreement to host the Grand Final at the MCG ends.

The deal comes on top of the Government’s recently announced $225 million funding package for the redevelopment of Etihad Stadium and its surrounds, which intends to open up the western end of the precinct to the waterfront across Harbour Esplanade, and could bring a new luxury hotel and hospitality offerings.

The AFL, which recently bought the venue itself, currently has its headquarters positioned between Etihad Stadium and the water, next to the Channel 7 studios at 160 Harbour Esplanade that the Treasurer also revealed has been acquired by State Government authority, Development Victoria for around $100 million, from the NRMA. The five-storey building of 7.,980sqm is on a 6,701sqm site and has around seven years left to run on its deal with the Seven Network.

Both deals are in addition to information released as part of the State Budget that was handed down on Tuesday.

Strong commercial property market brings stamp duty uplift: Budget papers showed that the stamp duty contribution from commercial property rose from 14.3% to 24.3% between July and December last year, and said that low office vacancies, strong rental growth and building approvals suggest they will remain high in the near-term.

Stamp duty is expected to increase by 3.8% over the 2018/19 financial year to $7.1 billion, following an 11% increase to $6.8 billion over 2017/18 as the residential property market hit its peak. The forward period growth is tipped to be around 3.2%.

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.