423-425 Elizabeth Street, Melbourne
An investor paid $11 million for the vacant double-fronted 315sqm shop. It is part of the old Argus Hotel and is on a 188sqm site.
1/35-37 Bald Hill Road, Pakenham
The 586sqm corner building home to Tasman Butchers sold for $3.15 million at a 4.74% yield, with a 10-year lease to November 2028 bringing $149,312pa plus GST and with 3.5% fixed annual increases.
225 Sherbourne Road, Eltham
The showroom home to Jaycar sold for $2.95 million, on a 4.70% yield. The electronics retailer has a 5-year lease to 2026 and options to 2036 over the recently refurbished 405sqm building, returning rent of $138,625pa with 2.5% annual increases.
221 Sherbourne Road, Eltham
The ABS service centre building sold for $1.18 million at a 4.55% yield. ABS, a subsidiary of ASX-listed Bapcor Limited, has been at the site for 26 years and has a 5-year lease to 2025 returning $53,638pa net.
3/118-128 Bromfield Street, Colac
The 489sqm building sold for $1.51 million, with a 5-year lease to July 2023 plus an option to Rivers, which is wholly owned by ASX-listed Mosaic Brands. Rivers pays $84,498pa net plus GST in rent, with 4% annual increases.
448 Centre Road, Bentleigh
Popular fish and chips chain Hunky Dory signed a 7+7-year lease over the 135sqm building at $70,000pa.
124 Jolimont Road, Jolimont
The Australian Institute of International Affairs sold its long-held East Melbourne offices for $5.7 million. AIIA bought the 342sqm Victorian Terrace building, known as Dyason House, in 1963 for £15,000. It was built in 1869 on a 473sqm site, and the buyer is a small local developer looking to build a high-end residential project.
2 Yarra Street, South Melbourne
The fully-leased office sold for $2,555,107 on 4.09% yield. The building has 3 tenants, Group Property Advisory, Normat Pty Ltd and Noxon Giffen Architects, for a combined rent of $104,463pa net.
Suite 2, 245 Bay Street, Brighton
A private charity organisation leased the 105sqm of space on a 3+3-year term at $42,000pa net.
15 Collins Street, Melbourne
A dentist snapped up the 106sqm level 7 strata office for $1.2 million.
G02, 8 Ellingworth Parade, Box Hill
Exceland Real Estate signed a 4+3-year lease at $52,250pa over the 145sqm building.
29 Gordon Street, Bairnsdale
The brand-new Australia Post distribution centre sold for $1.1 million, on a 5.98% yield. Zoned Industrial 1, the 1,905sqm site has 2 warehouses of a combined 720sqm and is used to service the East Gippsland region. Australia Post’s 3-year lease runs to March 2024 and has options to 2033, returning $65,795pa plus GST.
Unit 11, 1-9 Millers Road, Brooklyn
The 151sqm office and warehouse sold for $515,000 at a 5.43% yield, with a new 2 years and 2 months lease to a mobile phone accessories company, with 2+2-year options.
13-17 Jessica Way, Truganina
Sustainable infrastructure specialist Acciona sold the 11,900sqm site that it previously occupied for $7.3 million plus GST. It has a 2,055sqm building with 1,275 sqm high-clearance warehouse and 780sqm of offices. The new owner intends to lease out the property.
2/539 Mt Derrimut Road, Derrimut
Commercial printer Egoprint is expanding into a second facility, signing a 5-year lease over the 10,159sqm site at $360,000 pa plus GST and outgoings.
121-139A Dohertys Road, Altona North
Ron Crouch Transport leased the 8,981sqm office and warehouse facility, with 4 recessed docks and 81 parking spaces, for 5 years at $85/sqm. The property is owned by ASX-listed real estate construction and development company Lendlease.
393 Bridge Road, Richmond
A developer bought the 752sqm site on the corner of Coppin Street for $8 million. Zoned Commercial 1, it has 70m of combined frontage and is currently occupied by Thrifty car and truck rental.
419 North Road, Ormond
The Uniting Church sold off the 2,044sqm slab of land at the rear of the church building to a developer for $5 million. The property sold with a permit for 14 townhouses.
Melbourne’s Commercial Property Shows Resilience
Melbourne’s commercial property market continues to demonstrate its resilience and adaptability, with another remarkable investment result realised in the face of changed sales conditions.
A scheduled on-site auction for the warehouse site at 3 Graham Road, Highett - home to artisan bakery The Flour House - through David Bourke and Tom Fisher of Fitzroys was quickly flipped to an online event as Melbourne was plunged into a sixth snap lockdown on the afternoon prior.
Bourke oversaw the virtual auction from his home and the property was knocked down to a private investor for $2.755 million, at a whopping 45% above the reserve set by the vendor that had held the property since 1965.
The sale price also reflected a remarkably tight 2.7% yield, with The Flour House having a long 5+5-year lease returning $79,769 plus outgoings and GST. Functional improvements comprise a part-single and 2-storey 1,115sqm office and warehouse with dual roller shutter door access and on-site parking to Graham Road.
Fisher said the purchaser was attracted to the location and future development potential of the dominant 1,344sqm site with more than 30 metres’ frontage to Graham Road.
Zoned Commercial 2, the site also offers direct access to major arterial links including Nepean Highway and Beach Road, providing easy access to the CBD and the south-east suburbs.
“Melbourne’s commercial property market has again proven its adaptability and resilience. We had 10 registered bidders dial in to the virtual auction, and together with the remarkable result this shows that intermittent lockdowns have not deterred buyers,” Bourke said.
Fisher added “Vendors have seen growing evidence there are large volumes of capital out there that investors are willing to deploy, and with technological and logistical advances all parties are much more confident in proceeding with auctions and achieving a strong result.
“There remains pent-up demand for income-producing assets by investors, it was also evident through the campaign that demand from occupier was strong too”
Fisher said the seamless transaction for all parties saw the electronic exchange of contracts and transfer of funds immediately afterwards.
Fitzroys sold other investment properties in Church Street, Brighton and Burke Road, Camberwell for a combined $12 million-plus over 2 auctions in May as Lockdown #4 came into effect.
13 Church Street sold for $6.070 million, at a sharp 2.5% yield, following the announcement of the snap lockdown and just hours before restrictions came into effect, and 634 Burke Road, occupied by Mecca Cosmetica, sold for $6 million – an incredible $1.4 million above the reserve, under the virtual hammer the following day.
Fitzroys made the decision to keep up the momentum of the campaigns for the long standing vendors (of 46 years and 60 years respectively) and push on with proceedings.
A local has bought the freehold of The Tudor Inn in Cheltenham for $15.66 million, in another major pub sale through Melbourne’s south-east.
The 1281 Nepean Highway property sold at a 3.8% yield, with a 7-year lease to ALH Group, part of ASX-listed Endeavour Group, returning $592,855pa net. It is on a 4,789sqm site with 60 parking spaces and a BWS liquor outlet.
The vendor, ALE Property Group, has divested more than $100 million of non-core assets this year, including the Boundary Hotel on East Boundary Road in East Bentleigh. It sold earlier this year for $33 million at a 4.23% yield, with a lease also to Endeavour Group until 2028 plus multiple10-year options.
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.