Weekly Wrap

Fitzroys Weekly Wrap - 25th May 2018

Posted on 25th May 2018

Retail Sale, 171-173 High Street, Kew
The 332sqm building of two ground-floor shops and first-floor residence sold for $4.175 million under the hammer. On a 283sqm site with dual frontages and on-site parking, it has a total passing income of $164,113pa plus outgoings.

Retail Sale, Shops 1 & 2, 227-229 Bay Street, Brighton
The neighbouring shops have a building area of 130sqm on a combined 200sqm site, and sold prior to auction for $1.1 million, at a 5.4% yield.

Retail Sale, 607 Sydney Road, Brunswick
An investor paid $1.5 million for the Commercial 1-zoned two-storey freehold, which is on a 180 sqm site and leased to Tabet’s Bakery and a first-floor three-bedroom apartment.  

Retail Lease, 10 Howey Place, Melbourne
Ethical pie baker Princes Pies signed a 5+5-year deal for the 22sqm CBD space at more than $2,300/sqm for its maiden offering.

Retail Lease, 470 Little Lonsdale Street, Melbourne
New Life Hot Pot Restaurant is opening its second CBD site after signing a 7+7-year deal over the 165sqm two-level building, at $160,000pa.

Retail Lease, 65 Gertrude Street, Fitzroy
Phillip and Lea Homewares inked a 5+5-year deal at $85,000pa net over the 65sqm shop.

Retail Lease, 64 Mount Alexander Road, Travancore
Fernwood Fitness has leased 1,000 sqm of ground floor space within the former Officeworks site on a 12-year deal. The 1,580 building building has been subdivided.

Office Sale, Level 4, 306 Little Collins Street, Melbourne
Expanding group Mobile Monster bought vacant 320sqm whole floor for $2.58 million, at around $8,062/sqm.

Office Sale, 1A & 1B Weir Street, Glen Iris
The Industrial-zoned office property has a total building area of 875sqm and sold for $3.435 million, with long-term leases to Active Pipe and Bounce Inc. bringing more than $207,000pa.

Office Sale, 238 Albert Road, South Melbourne
Zoned Commercial 1, the converted period property is on a 336 sqm site and was offered with potential to be used again as residential, or as medical or commercial premises. The $1.75 million sale price reflected a 2.1% yield on the passing rent, and building rate of $14,112/sqm.

Office Lease, 136 Exhibition Street, Melbourne
Following the exit of Australia Post, two fully-fitted floors of 617sqm each have been leased to new tenants AECOM Australia on a five-year deal, and PLP Building Surveyors on a six-year deal, at around $470/sqm net.

Land/Development Sale, 80-82 River Street, South Yarra
A local developer paid $5.25 million for the 561sqm site, zoned Flexible Activity Centre and with a potential height allowance of five levels. Sold with a holding income until October of $80,300 plus outgoings and GST.

Land/Development Sale, 8-12 Montgomery Street, Ringwood
Zoned Residential Growth, the three adjoining homes on a combined 2,151 sqm site with a street frontage of almost 46m sold together for $4.42 million.

Land/Development Sale, 59 Droop Street, Footscray
A local developer paid $1.8 million to secure the 793sqm Residential 1-zoned site, which has approval for a project of 19 apartments averaging 57sqm.

Specialised Asset Sale, 720 High Street, Kew East
The recently-refurbished Guardian Early Learning Centre sold for $6.5 million at a 5.22% yield, with a 20+10+10-year lease. It is on a 775sqm corner site with 12 on-site parking spaces.

Talking points

CBD sub-$15 million assets continue to change hands: The historic four-level, 440sqm building at 11 Heffernan Lane in Chinatown has become the latest asset in Melbourne’s CBD to sell in the sub-$15 million range, changing hands for $6.3 million at auction at a 3.38% yield.

Currently leased to GT Internet Club on an eight-year deal, the building was constructed in 1891 and was home to Wing Ching, considered one of the first Chinese restaurants in Melbourne patroned by Westerners.

In recent weeks, the two-level building home to Denis Lucey’s Bottega restaurant at 72-74 Bourke Street sold to a local investor for more than $7 million at a sub-3% yield, while the five-level mixed-use building at 220 Bourke Street sold for $15.205 million at a 2.99% yield under the hammer.

The two-level former home of the Royal Antediluvian Order of Buffaloes, at 22 Sutherland Street, recently sold with vacant possession to a developer for $6.25 million. 

Earlier this year, the seven-level, 750sqm Elizabeth Chambers gold rush-era building at 21-23 Elizabeth Street sold for $9.62 million, also at auction. The upper four levels have been unused for some time, while the lower levels are leased to a tattoo parlour and High City Voltage. That followed the 550sqm circa-1891 building at 185-187 Lonsdale Street, home to iconic Greek eatery International Cakes and nightclub Storyville, selling to a Chinese investor for $10.15 million at a 3.94% yield.

Oakleigh on song: Two sites at the gateway to Oakleigh’s commercial and hospitality precinct have changed hands in quick succession. The 585sqm corner site at 2-4 Atherton Road, overlooking busy Warrigal Road, sold under the hammer for $4.21 million, with development potential of up to eight storeys. It currently has a two-level 435sqm retail and office building and on-site parking, and is across from a five-storey, 46 apartment development underway at 59-63 Warrigal Road, while 37-41 Warrigal Road nearby has approval for an eight-level.

A nine-storey mixed-use development is approved for 11 Chester Street, on the same block at 2-4 Atherton Street, while a permit has been granted for a 95-apartment project at 89 Atherton Street.

Meanwhile, the two-storey H&R Block office building at 11 Atherton Road has just been picked up by a private investor for $2.85 million, at a 2.6% yield.

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.