Weekly Wrap

Fitzroys Weekly Wrap - 16th July 2021

Posted on 16th July 2021

Lot 3/617-643 Spencer Street, Melbourne
Sydney-based Krost Business Office Furniture bought the 2,371sqm showroom and warehouse for $9.25 million for its first Melbourne site. The 2-storey building has a 60m frontage to Spencer Street.

1/382-386 Burwood Road, Hawthorn

A local owner occupier bought the vacant 164sqm space, on the ground floor of The Kent apartment building, for $1.5 million.

496 Tooronga Road, Hawthorn East

A private investor bought the 88sqm building on a 96sqm corner site for $1.25 million, at a 3.7% yield. It has been occupied by a butchers for more than 50 years and sold with a 5+5+5-year lease to Len’s Quality Meats.

27 Victoria Parade, Collingwood

Offered for the first time in 43 years, the shop and dwelling sold for $1.51 million with a 5+5-year lease from 2018 to Pizza Hut, returning $49,820pa net plus GST.

194a Chapel Street, Windsor

Skin Club Cosmetic Doctors signed a 5-year lease over the 60sqm space at $45,000pa net, or $750/sqm.

12/131-147 Walker Street, Dandenong
The 622sqm 1st floor office, leased to Anglicare Victoria, sold for $1.7 million on a 7.28% yield to a private investor. It is within the Hub Arcade, which has several retail tenancies on the ground floor. Anglicare renewed its lease on a 2+3-year deal returning $123,805pa net.

336 Glen Huntly Road, Elsternwick

OCTEC Employment Agency signed a 2-year lease for the 205sqm office for $85,000pa net, or $415/sqm.

29 Metropolitan Avenue, Nunawading
A prestige car company bought the 625sqm office and warehouse for $2.75 million.

Rear 107 Whitehorse Road, Blackburn

Sydney Tools leased the 1,164sqm office and warehouse with 17 on-site parking spaces at $140,000pa plus outgoings and GST, as an expansion of its existing showroom at the front.

100-102 Bouverie Street, Carlton
A developer paid $3.175 million for the 183sqm site, which has a permit for 44 student accommodation apartments.

33 Grange Road, Caulfield East

An interstate investor paid $2.825 million for the 485sqm apartment block. Zoned Neighbourhood Residential, the 980sqm site has a 2-level building with 3-bedroom and 2-bedroom apartments, and sold with 1 lease in place returning $25,812pa. The potential fully-leased income is $115,000pa.

330 Point Cook Road, Point Cook

The vacant 1,459sqm site, located 660m from Sanctuary Lakes Shopping Centre, sold to a developer for $750,000.

47-48 Douglas Street, Noble Park

The Tyre Factory outlet, on a 1,247sqm island site, sold for $3.05 million with 18 months remaining on its lease.

81 Raglan Street, Port Melbourne
The 110sqm medical clinic building sold for $1.205 million with a short-term lease.

Fortis Strengthens Victoria Development Pipeline
Sydney-based developer Fortis has bought a pair of South Melbourne sites with plans to build $112 million worth of commercial developments.

The separate sites, at 313-317 Kingsway and 34 Eastern Road, were bought for a combined $17 million.

The 330sqm Kingsway site will be developed into an 18-level office tower with 4,600sqm of net lettable area and valued at around $65 million.

Fortis paid $12 million for the Eastern Road site, which it will develop into a 3,890sqm, 7-level office building with ground floor retail and valued at $47 million.

Fortis is already developing 4 other sites in South Melbourne, including a $38 million, 9-level office building at 67-69 Palmerston Crescent, which it bought at the start of the year for $8.55 million. It is also building a 6-level office building at 18-22 Thompson Street that will have a $27.5 million end value.

In November, it bought the 1,298sqm Richmond corner site at 8 Brighton Street, on which it will build a 9-level apartment, retail and office building with an end value of $90 million

Buyer Opts for Suburban Office Investment
Vantage Property Investments has sold off a Box Hill office building for $17.15 million to a local private investor.

The buyer does not have plans for immediate development, despite the property selling with approval for a 30-level mixed-use development.

The 4-storey, 3,028 sqm building at 26-28 Prospect Street is 91%, and with an average lease term of 1.5 years.

Vantage Property Investments bought the property in 2002 for $5.9 million.

City Fringe Continues to Attract Tenants
In the office leasing market, the character and lifestyle attributes and accessibility of Melbourne’s city fringe continue to attract tenants in the shifting environment.

The Card Network has leased a 635sqm rare freestanding building on bustling Swan Street, Richmond. Fitzroys Associate Stephen Land has negotiated a 5-year deal at the 635sqm freestanding 250-254 Swan Street building at $254,000pa plus GST.
“Considering what is often referred to as a ‘challenging’ office leasing market, this office attracted a healthy stream of enquiry from a range of different office users and hybrid retail/office tenants. From the campaign’s launch in early April, terms on a Heads of Agreement were agreed in just over a month’s time,” Land said.

“The self-contained nature of the building, and its direct street exposure within the hugely popular Swan Street strip were huge drawcards, as was the rare, large outdoor terrace garden which was perhaps the factor that most tenants referred to,” Land said.

He said the character and charm of the heritage building, with its high-vaulted ceilings and exposed bluestone walls, also generated a substantial amount of enquiry.

“Lifestyle and wellness aspects of a workplace are more important and sought-after than ever, from the work space itself to the surrounds.

“Vibrant precincts are a huge attraction to businesses wanting to attract and retain top-tier talent. Home to one of Melbourne’s best hospitality offerings, Swan Street is busy at all hours with a number of quality places to get a coffee, or drinks or a meal, or to break up the day with a meeting out of the office.

Land said highly-accessible locations remain front-of-mind with flexible working arrangements in vogue.

“The reassessment of office space requirements in the COVID period will see ongoing fluid movement of tenants between the CBD, inner-city and inner suburban markets for some time,” he said.

“Groups have revised their space requirements and in the shifting environment, and we continue to see tenants looking for highly accessible locations while taking opportunities to seek out spaces they previously would not have considered.”

“Swan Street is easily accessible by car with major arterial roads nearby, as well as multiple tram routes and busy Richmond station,” he said, adding that the property’s associated on-site parking enhanced this further.

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.