Weekly Wrap

Fitzroys Weekly Wrap - 9th April 2021

Posted on 09th April 2021

15 Dalton Road, Thomastown
An investor bought the Carl’s Jr fast food restaurant site for $6.41 million at a 4.62% yield. The brand-new 371sqm restaurant building is on a 2,605sqm site with a 59m frontage, and is leased for 10 years plus options running to 2045 with a current return of $295,860pa plus GST net.

Shop 1, 297 Harvest Home Road, Epping

A self-managed super fund investor acquired the 214sqm strata-titled corner building for $1.6 million. Located within the Aurora Village Town Centre, it is leased to Indian eatery Urban Tadkaa on a 7+7-year deal returning $92,700pa plus GST.

1B/38 Craigieburn Road, Craigieburn

The 65sqm strata-titled pizza shop within Craigieburn Plaza sold for $785,000, with a lease until 2022 plus options to 2032 and returning $42,677pa plus GST.

200 Gipps Street & 1-7 Harper Street, Abbotsford

The 4,600sqm showroom and warehouse will be converted from a furniture and homewares store to an soccer retail experience concept. Ultra Football, which has an existing Sydney site, offers brands including Nike, Adidas, Puma and Mizuno, and the site will feature a football pitch, PlayStation lounge, café and restaurant, and barber. Asking rent for the property, which is on a 4,190sqm island site, was $1 million pa.

1 Sparta Place, Brunswick

Jewellers Arbor Brunswick are moving into a larger premises within Sparta Place. It signed a 5-year lease plus option for the 100sqm space, opposite the Mariana Hardwick building, at $37,500pa.

595 Station Street, Box Hill

Noodle restaurant Bowltiful will open its 2nd location, leasing the 330sqm shop on a 5+5-year deal at $230,000pa net.

883 Toorak Road, Camberwell
The vacant 466sqm building sold for $3.4 million. It comprises 3 separately-titled unfurnished strata offices that had been held by respective local private owner occupiers for over 20 years.

26 Production Drive, Campbellfield
The vacant 675sqm office and warehouse sold for $990,000. Zoned Industrial 1, it is on a 1,092sqm site with 4 on-site parking spaces.

2 McLellan Drive, Kensington

The 309sqm building with 3 on-site parking space sold for $940,000 with a short-term lease returning $36,508.

2/157 Hyde Street, Yarraville

The vacant 197sqm unit sold for $760,000.

Unit 32/35-37 Jesica Road, Campbellfield

A local buyer bought the 295sqm strata unit for $610,000.

Cnr Frankston-Dandenong Road and Colemans Road, Dandenong South

4WD Supacentre committed to a 7-year pre-lease for a 13,603sqm warehouse within Pellicano’s Innovation Park estate, at $95/sqm net.

77-81 Boundary Road, North Melbourne

Euro Collision Care Pty Ltd signed a 3-year lease for the 765sqm corner warehouse at $130,000pa net after the previous tenant surrendered their lease.

365 Cotham Road, Kew
Developer LNYL flipped the 1,259sqm corner site at a 50% premium to when it bought the property 3 years ago. A permit was since obtained for a 14-apartment project designed by Ewert Leaf Architects, and LNYL has just sold the site for $5.4 million.

405-413 Upper Heidelberg, Ivanhoe
After opening a new larger facility close by, developer and aged-care operator BlueCross sold the vacant aged-care facility for $8.63 million. The facility has a combined 1,942sqm of buildings on a 5,345sqm site and was licensed for 51 beds. A private international investor bought the property with plans to lease it to a supported accommodation group before redevelopment in the longer term.

Shop 7, 307 Ballarat Road, Footscray

A local GP bought the 122sqm suite for $650,000 at a 6.3% yield. It returns $26,000pa net from a lease to a medical clinic and has an existing permit for 2 medical practitioners.

Defensive Retail Assets Popular
Major retail assets with strong defensive characteristics continue to be popular, with a shopping centre-anchored mall in Caroline Springs and the large format Watergardens Homeplace centre both selling for more than $233 million combined.

Investor and developer Colin DeLutis’s DeGroup bought the CS Square shopping centre in Caroline Springs from a Lendlease fund for $136.5 million. The 25,308sqm centre traded on a 6% yield and comprises 3 supermarkets and discount department stores, with a weighted average lease expiry of more than 7 years.

The sale also included CS Commercial, a 1,603sqm complementary mixed-use precinct opposite CS Square, and another 1.28ha of vacant land in 2 separate lots.

Meanwhile, Harvey Norman bought the large format retail centre Watergardens Homeplace in Taylors Lakes from QIC Global Real Estate for $97 million, at a 4.75% yield.

The 25,931sqm centre is on 7ha opposite the Watergardens Town Centre and comprises Bunnings, a Harvey Norman outlet, and 6 national tenants alongside Hungry Jack’s and KFC restaurant pad sites.

Harvey Norman’s $3.1 billion property portfolio equates to about 14% of Australia’s large-format retail property market.

The large-format sector has performed well throughout the past 12 months, as Australians redirected much of their expenses and travelling spend toward their homes.

Next Test Set for Melbourne’s Strip Retail Investment Market
Melbourne’s retail and commercial property market is set for its next test, with the auction of a securely-leased Burke Road, Camberwell asset located in the absolute prime of the famous shopping strip.

Fitzroys agents Chris James and Chris Kombi are marketing 580 Burke Road, Camberwell on behalf of private owners that have held the property since 1977.

The commanding, dual-fronted 344sqm freehold is located in the heart of Burke Road, Camberwell on a 361sqm site with 2 genuine street frontages to both Burke Road and Market Place.

Highly successful national apparel tenant Witchery, part of Country Road Group, has a long lease over the property that returns

$289,230 per annum net. Showing confidence in the location, Witchery extended the lease last year.

Witchery has activated the open plan ground floor retail area to both frontages, providing a clear walk through from Burke Road to Market Place. The frontage to Market Place provides additional activation to the major car park, Camberwell Fresh Food Market and a bustling hospitality precinct.

The first floor is accessed via an internal stair case and comprises staff amenities.

Zoned Commercial 1, the property offers numerous alternative future uses and development outcomes, and its configuration allows for potential to subdivide the premises into 2 tenancies.

Kombi said there have been very few high-quality, well-located properties within Melbourne’s shopping strips offered for sale over the past 12 months.

“The security of bricks and mortar assets has become even more highly sought-after during the COVID period and in the ultra-low interest rate environment.

“Well-located Melbourne retail and commercial property with strong tenancy profiles and long-term leases present among the best examples of these investments.”

James said Melbourne’s shopping strips have demonstrated their resilience over the past 12 months.

“Local neighbourhood strips been the place for Melburnians to reconnect with their local communities - to have a coffee, catch-up with friends, or to break up the day and go shopping, particularly as working from home becomes more widely practiced.”

The property is just metres away from 751-753 Burke Road, home to national retailer Mountfords Shoes on a long-term lease, which Fitzroys sold for $7.55 million in the first auction of a prime Melbourne shopping strip asset in 2021.

“The sale reaffirmed Burke Road, Camberwell’s status as one of Melbourne’s most valuable and best-performing retail and lifestyle precincts,” James said.

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 2021 Fitzroys.