Weekly Wrap

Fitzroys Weekly Wrap - 18th May 2018

Posted on 18th May 2018


Retail Sale, 19 Glen Eira Road, Ripponlea
The 77 sqm shop sold for $1.001 million under the hammer at a 3.49% yield. It is on a 108 sqm site and currently returns $35,000pa.

Retail Sale, 145 Carinish Road, Clayton
Owner occupiers have traded the Indian Supermarket at auction for $1.42 million. Zoned Commercial 1, the 240.5sqm shop is on a 316sqm site and has a 7m frontage.

Retail Sale, 258 High Street, Melton
A local owner occupier bought the single-storey retail property with vacant possession for $820,000.

Retail lease, Shop 4, 286 Toorak Road, South Yarra
Monochrome Coffee and Tea secured the prized Toorak Road retail space, near the iconic intersection with Chapel Street, signing a five-year lease with a five-year option at $705/sqm. It is positioned across from the 50-storey Capitol Grand development and Como commercial development, and near the booming Forrest Hill precinct.

Land/Development Sale, Lot 7, 764 Barwon Heads Road, Armstrong Creek
A private developer has paid $1.318 million for the 2,199sqm site in the rapidly growing suburb, with intentions to build a retail offering with one or multiple tenancies. The property is in a high exposure location adjacent to the recently-opened The Village Warralily Shopping Centre, and is between a McDonald’s and a 7-Eleven service station.

Specialised Asset, 1066 Centre Road, Oakleigh South
The new childcare centre sold for $9.5 million, with a lease until 2042. It has a 1,002sqm building and 988sqm of outdoor playing area, and a permit for 139 places.

Office Lease, 344-346 Sydney Road, Coburg
Permit Point Building Consultants has signed a five-year deal with a five-year option for the two-level, 380sqm building with six on-site car spaces at $55,000pa, at $145/sqm. 

Office Lease, 208 Camberwell Road, Hawthorn East
Chinese development giant Dahua Group signed a three-year lease deal over the 180sqm space, and will pay $105,000pa net, at $583/sqm.

Talking points

Suburban office buildings across Melbourne change hands: Vantage Property Investments syndicate, Diversified Number Two Pty Ltd has offloaded two office assets in Mulgrave and Box Hill in separate off-market deals. Fitzroys Director, Paul Burns negotiated the sale of 271 Wellington Road in Mulgrave for $9.75 million to a Singapore-based investor making their first Melbourne acquisition. 

Burns said the purchaser was attracted to the staggered lease expiry profile and improving office market fundamentals in the outer east, with the outlook now for rental growth and diminished tenancy incentives.. The 1,814 sqm building has 64 car spaces and sold for $9.75 million, at a passing yield of 5.85%.

In the other deal, the syndicate sold off 18-20 Prospect Street in Box Hill for $14.72 million. The three-level, 2,387 sqm building has 84 parking spaces over two levels, and is leased to three tenants with a 3.3-year WALE, with the sale price reflecting a passing yield of 5.55%.

Closer to the city, a 1980s office building at 1 Oxley Road of 1,302 sqm in Hawthorn sold for $15 million under the hammer at a 3.21% yield. It is on a 1,264 sqm island site. A local family purchased the asset from Probuild founder Phil Mehrten.

Meanwhile, a local purchaser paid $15.31 million to an international not-for-profit group for the the 2,765 sqm North Melbourne office building at 552 Victoria Street. It is on a 1,957sqm site at the junction of King, Victoria and Curzon Streets, and was offered with a short-term leaseback and traded at a 2.3% passing yield.

CBD restaurant premises snapped up: The two-level building home to Bottega at 72-74 Bourke Street sold to a local investor for more than $7 million at a sub-3% yield. Bottega, run by Denis Lucey, recently signed a long-term lease extension, and has been at the site since 2002. It is on a 198sqm site with an eight-metre frontage. The vendors were a group of investors that includes celebrity chef Guy Grossi, who is a judge on TV’s My Kitchen Rules.

In the west end of the CBD, the Archie Greens restaurant premises at Shop, 517 Flinders Lane, fronting Katherine Place, sold in an off-market deal for $4.1 million, at a 4.68% yield.

Balaclava landmark sells at another premium: The 3,132 sqm Beller House commercial building, on a 2,720 sqm corner site at 281A-289 Carlisle Street, has changed hands for the third time in four years.

The most recent sale came with a price tag of $22.25 million, at a land rate of around $8,000/sqm and building rate of $7,000/sqm. It traded in 2014 for $12.5 million, and the owners sold it 12 months later for $18.5 million.

The two and three-level building is zoned Commercial 1 and has 18 tenancies, with retail, office, gym, restaurant and medical businesses among its occupants, and returns $1.09 million per annum.

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.