Weekly Wrap

Fitzroys Weekly Wrap - 30th July 2021

Posted on 30th July 2021

000 Retail 05

408 Burwood Road, Hawthorn
The 557sqm corner site sold for $4.44 million with a passing income of $193,000pa net, and a potential fully-leased income of $216,000pa net. Zoned Commercial 1, it has a 2-level 800sqm building, 9 on-site parking spaces and 3 street frontages totalling more than 70m.

191-199 Springvale Road, Springvale

An owner occupier bought the vacant adjoining showrooms for $2.775 million. They have a combined 1,115sqm floor area.

648 Glenferrie Road, Hawthorn

Frozen yoghurt retailer Frozen By A Thousand Blessings leased the 234sqm, 2-storey building for 5 years at just over $89,000pa net plus outgoings and GST.

706 Glenferrie Road, Hawthorn

National bakery and patisserie Breadtop signed a 5-year lease plus an option for the 97sqm shell with an outdoor space at $84,000pa plus GST gross.

000 Offices 05

183 Flinders Lane, Melbourne
A local architectural firm that has been on Flinders Lane for 20 years bought the 364sqm loft-style apartment for $4.3 million to use as an office. The level 5 penthouse has been used as a residence by architect John Denton and artist Susan Cohn. It is within the Toronto House building that was bought for $1.57 million in 1991 by a syndicate including John Denton and developer Morry Schwartz.

24 Lakeside Drive, Burwood East

A pair of ground floor office suites within the Tally Ho Business Park have been leased. Basepair Genomics Pty Ltd signed a 2-year lease with an option for the 137sqm Suite 2 at $37,990pa net, while BP Genomics Pty Ltd took out a 2-year lease at Suite 8 at $38,000pa net.

101 Greville Street, Prahran

Diamond Energy leased the 445sqm office for 5 years at $130,000pa.

000Industrial 05

131 Scanlon Drive, Epping
A business owner bought the 1,983sqm clear span warehouse facility for $4.15 million.

72-74 Cyber Loop, Dandenong South

Hi-Spec Group bought the vacant 2,064sqm facility with 21 car spaces for $2.765 million.

3/25 Howleys Road, Notting Hill

The 324sqm office and warehouse sold for $1.071 million, with a lease running until September returning $54,000pa net with no further options.

13-15 Curie Court, Seaford

The collection of 17 warehouses ranging from 83sqm to 162sqm sold to a mix of small businesses and investors at rates from $2,900 to $3,200/sqm.

Unit 30, 41-49 Norcal Road, Nunawading

The strata industrial unit sold for $750,000 at a 3.7% yield, with a 3-year lease to a floating floor importer that returns $28,000pa.

55-57 Lakewood Boulevard, Braeside

Supplement maker Australian Natural Industry Pty Ltd leased the 2-level 1,737sqm office warehouse on a 2,662sqm site at $170,000pa net.

000 Development 05

Harvest Home Road, Epping
A local developer bought the 2,349sqm site within Aurora Estate for $12 million. It has a permit for 109 townhouses and 2 super-lots. The land is next to the Aurora Village shopping centre, which has a Coles, a gym and specialty shops. The vendor was an investor that paid $7.37 million for the land in 2017.

13 Warwick Street, North Melbourne

Zoned Mixed Use, the 527sqm brick warehouse site sold after nearly 20 years of ownership for $2.9 million, with a permit for 5 townhouses.

000Industrial 05

50-52 McCrae Street, Dandenong
Pelligra Group bought the former Ramada Encore Hotel building for $10.5 million. The 180-room, 4-star hotel has 24-hour reception, restaurant, bar, gym and meeting rooms, and 101 parking spaces, on a 2,370sqm site. Pelligra will look to refurbish and reposition the hotel.

000 Development 05

Harvest Home Road, Epping
A local developer bought the 2,349sqm site within Aurora Estate for $12 million. It has a permit for 109 townhouses and 2 super-lots. The land is next to the Aurora Village shopping centre, which has a Coles, a gym and specialty shops. The vendor was an investor that paid $7.37 million for the land in 2017.

13 Warwick Street, North Melbourne

Zoned Mixed Use, the 527sqm brick warehouse site sold after nearly 20 years of ownership for $2.9 million, with a permit for 5 townhouses.

000 Specialised 05

50-52 McCrae Street, Dandenong
Pelligra Group bought the former Ramada Encore Hotel building for $10.5 million. The 180-room, 4-star hotel has 24-hour reception, restaurant, bar, gym and meeting rooms, and 101 parking spaces, on a 2,370sqm site. Pelligra will look to refurbish and reposition the hotel.

000 Talking Points 05

Melbourne’s Shopping Strips Demonstrate Their Resilience
Melbourne’s shopping strips have demonstrated their resilience throughout the biggest crisis the city has faced in decades.

Working from home and a sudden surge in demand for takeaway and delivery food services has helped support activity in Melbourne strips throughout multiple lockdowns during the COVID period, according to Fitzroys’ 2021 edition of Walk the Strip.

“The COVID period reinforced the role of the iconic neighbourhood strips as a place for Melburnians to connect with their local communities while the city endured multiple lockdown periods,” Fitzroys Director, David Bourke said.

“Melburnians love their local villages. They have reinforced their position as the heartbeat of their local communities over the past 12 months,” Bourke said.

“During COVID – particularly during periods of localised travel restrictions – the shopping strip became something more than a place to run errands and do the shopping. They were the place to go to get a coffee, to meet friends for a walk, or to break up the day while we were working from home.”

While a reduction in the proportion of specialty and service retailers contributed to the empty stores, the food and beverage sector increased its presence across the strips, growing in 64% of the precincts, by far the best performing sector. Specialty retail, which includes fashion, homewares, and other discretionary shopping, increased in just 36% of strips, and service retail – hair and beauty salons, gyms, and medical – in 27%.

Vacancies increased on average by 2.6% across nearly 35 of Melbourne’s major shopping strips (from 7.7% heading into COVID to 10.3% currently), with a broad
variation of performances.

Church Street, Brighton
retained its status as arguably Melbourne’s – and perhaps Australia’s – most highly-regarded shopping strip. Its vacancy rate is just 0.7% - the only available shop is an assignment of lease. New entrants including Assembly Label, Store Chance and Oroton took the proportion of specialty tenants to nearly 58% – some 6% higher than it was 3 years ago, and the highest fashion and discretionary retail proportion of any strip in Melbourne.

Puckle Street, Moonee Ponds
is returning to its glory days as one of Melbourne’s most prominent shopping strips, posting a low 4.6% vacancy rate that is nearly half of what it was in 2019.

Centre Road, Bentleigh
meanwhile, is a key example of growing supermarket sales driving custom to shopping strips during the lockdowns, and maintaining some trading momentum throughout the 2020. The strip is anchored by Woolworths, Coles and Aldi. It has also been a beneficiary of level crossing removal, which has freed up traffic flow through the strip. Its vacancy rate has come down to 5.3%.

Smith Street, Collingwood
(5.1%) was a beneficiary of the trend towards working from home and flexible working arrangements that has spurred office activity across accessible locations in Melbourne’s inner suburbs that also have a quality hospitality and lifestyle at their doorstep. Swan Street, Richmond (6.4%) also retained low vacancy.

Glenferrie Road, Hawthorn managed to stay steady throughout the period. While vacancies lifted around 5% to double digits in the 12 months heading into COVID, the strip managed to weather the absence of Swinburne University students with a hefty take-up of food and beverage operators, and holds healthy prospects given the suburb’s growing office market and the pending return of in-person classes.

Toorak Village
saw one of the best improvements in vacancies (down 2.6% to 5.0%) with an affluent and white collar workforce that stayed at home supporting the strip. Similarly, Malvern Road, Toorak – better known as Hawksburn Village - was also low (5.3%), and below its longer-term average.

Despite being one of the better performers heading into the COVID period, Acland Street, St Kilda was impacted by COVID-enforced travel restrictions most deeply. The backpacker and tourist playground saw vacancies jump from 6.4% to 14.6%. It was among the 73% of strips that saw an increase in vacancies – however, these varied from negligible amounts in strips with healthy vacancy rates (such as Bay Street, Brighton, which lifted by less than 1.0%) to the more notable (the west end of Bridge Road, Richmond lifted 9.3%).

Fitzroys Associate Director – Leasing, James Lockwood, said retail strips continue to be honest reflection of the retail landscape.

“This is another chapter in the ongoing stories of Melbourne’s shopping strips,” Lockwood said.

“The nature of property ownership throughout the strips means they reflect where retail and its different forms are at a certain point in time, more so than shopping centres. Shopping strips have much more scope to develop their own character and personality. They reflect their demographic and their communities, and people see their communities in their shopping strips.”

More Sale Action On Flinders Lane
The Flinders Lane building home to Chris Lucas’ restaurant Kisume has sold for around $25 million.

Kisume occupies the lower levels of the 8 level building at 175 Flinders Lane, with offices above. The building is strata subdivided on a floor-by-floor basis allowing for sell-down potential.

The vendor was philanthropist Helen Sykes – wife of former AFL commissioner and Carlton player Mike Fitzpatrick – who bought the property in 2014 for $9.8 million. The Kisume fit-out cost around $5 million.

Earlier this year, Sydney hotelier Justin Hemmes paid $40 million for Tomasetti House at 277-279 Flinders Lane for his Merivale Group’s first venue outside of New South Wales. The historic 7-storey brick and bluestone building was bought fully leased, tenanted by Zomp Shoes on the ground level with office tenants above, and bar and restaurant The Mill House in the basement level.

That followed Swiss fund manager Fidinam buying the century-old CBD building known as Invicta House, at 226-232 Flinders Lane, from Swinburne University for $40 million as a value-add play.

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.