Who says the office is dead? Despite the many obituaries written for the office in the past 12 months, investors are undeterred.
This week, a Hong Kong investor splashed out $19.5 million on Beams Projects’ new office in Richmond.
The freshly leased building at 45 Wangaratta Street was snapped up in a deal reflecting a highly competitive 3.7 per cent yield with only a 21 day settlement.
Records show Cheerich Property, the local subsidiary of Hong Kong ragtrader Cherry Body Fashions, slapped a caveat on the property during the week.
The boutique 1413 sq m office project was built over the old Duchamp clothing warehouse in the old ragtrade precinct behind Richmond railway station and the Corner Hotel.
It’s now called the Richmond Interchange Precinct. The property sits on just 368 sq m reflecting a building rate of $13,829 a sq m and a land rate of $53,100 a sq m – new benchmarks for the city fringe office investment market.
A year ago, an old double-story factory at 32 Wangaratta Street on 629 sq m sold for $8.8 million. Records show it was bought by the Benjamin Duncan Property Group.
JLL agents Josh Rutman, Piers Jalland, Tim Carr and MinXuan Li ran the campaign which attracted more than 150 enquiries from local private investors, syndicates, and owner occupiers.
“The fact that the building continued to lease up well during the height of pandemic last year resonated well with buyers given the continued debate about the return to the workplace,” Mr Carr said.
Family Court
A cashed-up private investor has agreed to pay $12 million for the Dandenong Family Court building, despite the court’s lease expiring in 2023.
The uncertainty over the lease, especially as the court recently merged with the Federal Court, kept the yield comparatively high at 6.5 per cent.
Sources say it can be difficult to get bank financing at that kind of yield so the buyer is likely to have deep pockets.
The 2729 sq m office at 53-55 Robinson Street has been a family law court since the mid-1980s.
The Commonwealth government’s lease runs out in July 2023 and there are no further options. Annual rent is $782,413 a year.
The deal was done by Gross Waddell ICR’s Alex Ham and Michael Gross with CBRE’s Scott Orchard, Scott Hawthorne and Jimmy Tat.
Mr Orchard said the uncertainty stopped the transaction achieving the sharp yields usually obtained by government-leased buildings.
A Family Court representative told Capital Gain there were no plans to move.
City fringe
A family-run boutique student accommodation building on the city fringe has been listed for sale as the flow of international students dries up.
57-65 Drummond Street, Carlton
It is understood the 43-room property, known as Albert House, has just four students living in its dorms.
The 1600 sq m three-storey building at 57-64 Drummond Street was configured into accommodation in the 1990s but it started out as offices for the Australian Workers Union.
Records show the AWU sold up in 1997 for $1.05 million. It’s expected to fetch more than $10 million.
Expressions of interest, closing on July 1, are being handled by Gross Waddell ICR agents Raff De Luise, Julian Materia and Danny Clark.
The property is on a 604 sq m site near the corner of Queensberry Street and has room for 10 car parks.
Meanwhile, bigger players like Scape are planning towers for the Carlton precinct to house the students expected to return in the future.
Wizel buys
Former CBRE agent Mark Wizel, who struck out on his own last year, establishing the Wizel Property Group, is ramping up his activities.
Two shops opposite Fairfield railway station owned by Mr Wizel have been leased to Burgertory and the Bean Smuggler.
CBRE agent Jason Orenbuch said the 92 sq m and 98 sq m shops at 7-9 Railway Place, the foot of a new apartment building, were leased on 10-year terms.
Mr Wizel has been a keen investor in new strata title retail and confirmed he also owns around 150 sq m of space in Caulfield.
In Prahran, Wizel Property Group’s Lewis Tong made the winning bid of $5.2 million for a two-storey shop at 257 Chapel Street on the corner of Greville Street – a sharp yield of 3.35 per cent yield.
Mr Wizel did not return calls so it’s not clear if the group was acting as buyer or buyer’s representative.
Gross Waddell ICR agents Michael Gross and Andrew Waddell handled Thursday’s auction on the eve of lockdown.
The sale was struck at a building rate of $8228 a sq m and a land rate of $10,505 a sq m. There are offices on the first floor and the long-running discount store Supa Bargains on the ground. It returns $230,000 a year from leases expiring in 2026.
Two bidders competed in front of a crowd of around 40 for the property.
By Friday, auctions were back online and the Oreana Group paid $13.15 million for a row of faux Tudor shops at 169-175 Toorak Road. It adjoins South Yarra Square which it purchased for $35 million last month.
Faux Tudor
Speaking of faux Tudor shops and Prahran, a row opposite Prahran Market at 182-194 Commercial Road is expected to sell for $8 million.
The faux Tudor shops at 182-194 Commercial Road are expected to sell for $8 million.
The shops, leased to Red Cross, Mediterranean Butchers, Rare Earth Hair, Eugenie French Cake Shop and Carpe Diem Bar, are on 1130 sq m of activity centre zoned land which could allow for a five-to-seven level tower.
They return $380,000 a year in rent. Sonebridge agents Rorey James, Julian White, Nic Hage and Chao Zhang are handling the auction.
Castlerock sale
A regional syndicate associated with fund manager, Castlerock, is selling a Spotlight store in Sale.
The Gippsland Spotlight, has been held by the syndicate since 2004. It’s managed by Castlerock whose founder, Gippsland born-and-bred Hank Bronts, is also a member of the syndicate
Spotlight, a tenant of 30 years, has signed a fresh 10-year lease on the 216-228 Raymond Street property. Total income is $287,000 a year.
The 1908 sq m building is on a 6774 sq m site in the middle of town and expected to sell for more than $3.5 million.
Expressions of interest close on June 23 through Stonebridge agents Rorey James, Nic Hage, Kevin Tong and Justin Dowers.
Article Source: www.brisbanetimes.com.au
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