Weekly Wrap

Fitzroys Weekly Wrap - 23rd April 2021

Posted on 23rd April 2021

000 Retail 05

70-74 Mountjoy Parade, Lorne
A local private investor bought the Shell service station site for $4.075 million, on a 4.31% yield, as a long-term hold. The 1,160sqm site is on the corner of Grove Road and across from the Lorne Cinema. It has a 12-year lease until 2025 with a 6-year option and currently returns $176,000pa. The vendor bought the property in the early 1990s for $500,000.

10 Scoresby Road, Bayswater

A private investor bought the 585sqm showroom and warehouse in a $1.72 million sale and leaseback deal with 99 Bikes, on a yield of 5.81% and with a 10-year lease term.

Shop 5, 40 Hall Street, Moonee Ponds

The 172sqm strata-titled property on the ground floor of the Mason Square apartment development sold for $1.575 million at a 4.33% yield. It has a 10 5 5-year lease to café Mr Majestic with 3.5% fixed annual increases

Shop 3, 1295 Nepean Highway, Cheltenham

A local buyer paid $740,000 for the 180sqm single-level building, intending to open a tattoo parlour from the former aquarium space.

537 Warrigal Road, Ashwood

An American burger eatery leased the former Indian restaurant for 5 years at $35,000pa plus outgoings and GST. The 117sqm building comprises a commercial kitchen, 50sqm retail area and rear 2-bedroom residence.

539 Warrigal Road, Ashwood

Next door, a beauty and massage business that is expanding from Daylesford leased the 100sqm building for $28,000 plus outgoings and GST.

000 Offices 05

Suite 1/65 Oxford Street, Collingwood
An investor bought the 196sqm ground floor office with 6 secure parking spaces on title for $1.625 million. It is leased to Subway Developments Pty Ltd on a 4-year lease from 2020, with 5 further terms of 3 years each, currently returning $85,000pa. The Society of Hospital Pharmacists recently sold the other 3 office suites in the building in 1 line for $3.65 million. A rooftop Telstra tower returns further income across the building.

Suite 302, 521 Toorak Road, Toorak

An owner occupier bought the 100sqm fitted-out office suite for $700,000.

000Industrial 05

15 Fiveways Boulevard, Keysborough
The 4,392sqm office and warehouse on a 1.03ha site sold for $7 million at a 5.2% yield. It is leased to contract food manufacturers Mansfields on a long-term lease with an option and returns $365,149.

000 Development 05

101-109 Burwood Highway, Burwood
The Burwood Nissan property sold for $10.9 million, on a 5% yield. Zoned Mixed Use, the 3,928sqm corner site has a 2,639sqm showroom and returns $552,000pa net from a 3-year lease with 5 further 3-year options to Autopact Group.

2-6 Central Road, Blackburn

An interstate-based buyer paid $2.457 million for the 1,687sqm former petrol station corner site with plans to occupy in the future.

000 Specialised 05

1 Whitford Way, Doreen
Procon Developments sold the 1,136sqm Story House childcare centre facility on a 3,396sqm site for $7.37 million. Story House started trading from the site in February and has a 20-year triple net lease with an option to 2056, returning $368,750pa.

58 Patterson Road, Bentleigh

Inspire Early Learning leased the 869sqm childcare centre facility off-the-plan at $540,000pa. The centre will have a licence for 124 places and 27 basement car parks, and is to be developed by George Babatsias of Jet Oil Pty Ltd, the family-owned petroleum business that has owned the site for more than 20 years.

000 Talking Points 05

Second-Hand Economy Boom Prompts Business Expansion
The booming second-hand economy has prompted furniture dealer and retailer Mrs. Secondhand to acquire an industrial unit in Melbourne’s inner-north as an additional store and distribution centre for its expanding business.

Fitzroys Agency Associate Ervin Niyaz negotiated the off-market sale of 7/188 Plenty Road, Preston for $520,000 on behalf of Gruklap Pty Ltd and R & L Kimber Nominees Pty Ltd.

The vacant 196sqm warehouse and storage unit is within a 9-unit development built in the 1970s and which has shared parking spaces in the common area.

Mrs. Secondhand has been buying and selling secondhand goods since 2000. Their owners also operate a decluttering and property clearance business Pack Up Your Troubles, which includes working with numerous not-for-profit and community organisations to assist and support their clients.

The business sells online and globally via Gumtree and Facebook, while its warehouse shop buys and sells locally.

Niyaz was able to secure the deal using Fitzroys’ network of contacts. Mrs. Secondhand is making its 1st expansion from its existing warehouse in Brunswick, having run a successful business for a number of years and experiencing an acceleration during the COVID period.

“There has naturally been a greater focus on people’s homes over the past 12 months. With more flexible working arrangements becoming normalised, people will continue to explore enhancements to their home and workspace environment,” Niyaz said.

“Second-hand items can present unique character and quality, and satisfy nostalgia.

“Buyers are becoming more discerning when it comes to sustainability, and shopping for second-hand goods and items are seen as an immediate way to reduce an individual’s environmental footprint.”

A surge in activity in response to COVID was quickly seen throughout the second-hand economy, from op shops and independent operators through to online platforms such as Gumtree and eBay.

“Financial impacts of COVID have also shifted attention towards the second-hand economy, with some looking to make money from selling excess items around the home, and others looking for more cost-effective ways to acquire them,” Niyaz said.

“Second-hand furniture, homewares, clothing and other items will continue to experience a newfound popularity.”

Niyaz added that it made better financial sense for Mrs. Secondhand to own rather than rent its next location, with the business in a strong financial position and historic-low interest rates making buying a more attractive proposition.

World’s Biggest Pie-Making Factory Part of $141m Deal
ASX-listed fund manager Charter Hall has acquired a pair of food-making facilities in Bairnsdale and Pakenham for $141 million, in a sale and leaseback deal with Patties Foods. The deal includes a 30-year leaseback over each facility to Patties Foods.

Patties Foods is the maker of Four’N Twenty, Patties, Herbert Adams, Boscastle, Nanna’s, and Ruffie Rustic Foods, and recently bought the ready-to-eat meals business Fitness Outcomes.

The properties include Patties’ main production facility in Bairnsdale, which is on a 15.8ha site and is the world’s largest pie manufacturing facility, as well as a 22,384sqm manufacturing and meal preparation facility in Pakenham.

Charter Hall made the purchase through the its unlisted Charter Hall Direct Industrial Fund No 4.
The transaction takes place within days of industrial real estate group ESR partnering with Singapore’s sovereign wealth fund GIC to buy Blackstone’s Milestone Logistics portfolio for $3.8 billion, in what is believed to be Australia’s biggest-ever direct property transaction.

The portfolio has 45 assets and returns around $150 million each year in fully-leased income from about 100 different tenants. They include Woolworths, the world’s largest cold storage operator Lineage Logistics, WesTrac and Toll. The sites are located in Melbourne, Sydney, Brisbane, Adelaide and Perth.

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.