Investors are paying a premium for government-leased buildings. An office occupied by Centrelink and Medicare has sold for $4,415,000 on a tight yield of 5.67 per cent. Both leases on the property were recently renewed prompting strong interest from offshore and local investors, Burgess Rawson’s Shaun Venables, Alex Shum and Ming Xuan Li said. It was snapped up by an interstate Asian buyer.
Demand for suburban retail assets is high. A shop at 185 Main Street has sold for $2.2 million on a city-like yield of 3.86 per cent at a hotly contested Teska Carson auction. A crowd of 70 watched four bidders push the price well beyond the vendor’s reserve, George Takis, Michael Taylor and Fergus Evans said. It had a near-new lease to tenant Riot Art & Craft for $85,000 per annum.
A classic double-fronted freehold shop in Malvern sold under the hammer for $3.02 million, on a crisp 2.68 per cent yield. It was first time in more than 50 years the two neighbouring shops on one title, leased to Allpress Antiques and the Milton Wine Shop, were offered. Fitzroys’ Chris Kombi, James Lockwood and Jordan Ceppi handled the campaign for 1425-1427 Malvern Road, which sold for $420,000 above reserve.
Another shop at 476 Glen Huntly Road showed the hefty appetite of buyers, selling for $1.5 million on a sharp 3.7 per cent yield. The two-storey venue, leased to popular Russian restaurant Nevsky, went for $200,000 above reserve at auction after competition between five bidders, Fitzroys Mark Talbot and Chris Kombi said.
A Melbourne based investor has paid $1.15 million on a 3.48 per cent yield for a two-level, 146-square-metre, Victorian terrace building in a deal brokered by Teska Carson’s Fergus Evans and Tom Maule. The property at 410 Church Street is leased to a skin and laser clinic on a two-year term with a two-year option for net annual rental of $44,995 plus GST.
Health professionals are pushing up the values of consulting suites. Suite 515 at 100 Victoria Parade sold for $595,000 to an owner-occupier, demonstrating a 30 per cent increase in prices in the building over the past two years, Morley Commercial’s Jonathan Lu said. Mr Lu has sold eight suites in the building in the past 12 months.
A highly exposed single-level office at 183-185 Springvale Road has sold at auction for $1.67 million on a yield of 3.77 per cent. The deal for the 402 sq m office, on 555 sq m of land, was negotiated by JLL’s Tom Ryan and Peter Sprekos.
Five bidders competing at the auction of an old brick warehouse at 18 Earl Street pushed the price to $960,500, CVA’s Tom Gleeson and Anthony Carbone said. The 545 sq m building is leased to Superstone Premium Automotive Parts for $41,643 a year on a two-year lease.
A vacant showroom in the Bayswater Activity Centre has sold for $1.6 million. The investor was attracted to the 340 sq m former bank building at 743 Mountain Highway due to potential growth in the area and significant government investment in the precinct, JLL’s Tom Ryan and Marcus Quinn said.
A new free-standing office warehouse at Unit 4, 61- 69 North View Road sold to an owner-occupier for $1.19 million, Leo Mancino of CVA said.
Sportsgirl will open a store in Centre Road. Fitzroys’ Mark Talbot said Sussan Retail Group will set up Sportsgirl at 440 Centre Road on a five-year lease at $80,000 per annum. SRG has other franchises, Sussan and Suzanne Grae, on the strip. Other recent Centre Road tenants include food truck operator Mr Burger opening a concept store at 416 Centre Road and estate agents Hocking Stuart taking 379 Centre Road, both at rents of $80,000 per annum.
Skincare clinic Scolicare has leased a ground-floor property at 492 St Kilda Road for $290 per sq m on a 2+3 year lease. The deal was struck with a 7.5 per cent incentive. Monash University has taken level two of the same building on a one-year lease at $260 per sq m and Kosch Fertilizer signed up for the same rate on a five-year lease on level four. “Vacancy in this building has lowered from 16 to 6 per cent within months,” Lemon Baxter’s Jay Pavey said.
Refurbished suites at 1401 Burke Road’s Kew Corporate Centre have resulted in the building being fully occupied by smaller tenants. JLL’s Tim Sugar said landlord Devitt Nominees refitted commercial offices as well as open-plan suites with kitchenettes and toilets. New tenants include Thomas More Centre (Christian publications), Best Practice Program and TNT Property Group. JLL also secured The Lab Gaming Mechanics in Suite 3 at 830 High Street on a three-year term.
Complete Truck Bodies has leased a 1135 sq m office warehouse with 934 sq m of hardstand area at Pellicano’s M2 Estate. Complete Trucks signed a five-year lease at net annual rental of $120,000 for 110-112 National Drive. “There was high demand for leasing in the estate,” Knight Frank’s George Linn said.
Gray Johnson’s Matt Hoath and Scott Ashby negotiated a quick changeover of tenants at an industrial building at 329 Darebin Road, minimising lost income for the building’s owner. Building finishes specialist Alternative Surfaces took a four-year lease with a further four-year option at starting rent of $90,000 net.
Denmark-based tapware manufacturer Vola will set up its wholesale showroom at 94 Wellington Street. Vola leased a 110 sq m showroom for $38,000 a year plus GST and outgoings on a five-year lease, Gorman Commercial’s Dean Alexander said.
Charter Keck Cramer has appointed Glenn Lampard in the newly created role of strategic research principal – commercial. Mr Lampard will focus on enhancing the group’s research and supporting the valuations team. Mr Lampard was previously at Urbis, Savills, Knight Frank and CBRE.
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