A key Richmond development site on the corner of Swan, Mary and Harvey streets, near Burnley railway station, is also on the market.
The 1313 square metre parcel of land is home to Red Rooster and the Back in Motion Health Group and returns $304,000 a year in rent. While that is a handy investment return, it is likely to be sold to a developer and is expected to fetch north of $15 million.
The site at 294-298 Swan Street and 196 Mary Street was amalgamated by a local family between 2007 and 2016, with records showing they paid a total of $4.75 million.
JLL’s Josh Rutman, Jesse Radisich, Nick Peden and MingXuan Li are running the expressions-of-interest campaign, with Urbis acting as transaction advisor.
The Burnley end of Swan Street has undergone a huge transformation in the past 10 years, with the Zagame family converting a slew of old showrooms into high-end car yards.
Now, big developers and listed investment real estate trusts are rebuilding the landscape again.
Charter Hall is building a new $410 million headquarters for Australia Post at 480 Swan Street and Fortis has received planning approval for two mixed-use projects at 8 Brighton Street and 5 Wiltshire Street, worth about $300 million and covering 15 blocks of land.
Strata in demand
Despite rising interest rates, owner-occupiers are still keen on strata offices.
Colliers agent Ben Baines said owner-occupiers want more control over their workplaces and are setting new benchmark prices to get it. “Family offices, creative industries owners and professional services operators are all looking for spaces,” Baines said.
Baines and Matt Knox, with CVA’s Angelico and Ryan Milivojac, are selling Wilmac’s new Cremorne House, opposite East Richmond railway station.
Construction has started on the 18-office development, which is 30 per cent sold.
“The most recent sale was made to a local, creative industry owner-occupier, which reflected a building rate of $13,171 a sq m, and that was for an office of less than 100 sq m on Level 1,” Baines said.
“Most of the building in Cremorne has been weighted towards leasing and there hasn’t been much for sale for small-to-medium businesses,” he said.
In the CBD, three strata offices sold around Christmas. Two of them – level 7 at 313 Little Collins Street and level 5 of 414 Lonsdale Street – set fresh building records of between $11,324 a sq m and $9935 a sq m, respectively. In another transaction, office 102 at 517 Flinders Lane fetched $1.53 million. CBRE agents Nathan Mufale and Alex Brierley handled the deals.
The first test for the sector in 2023 will be the whole of level 2 at 313 Flinders Lane. The 280 sq m office has been owned and occupied by International Social Services since 1996.
However, not everyone is buying. The Australian Exhibition Group, which runs events such as Sexpo, Australian Tatoo Expo and the Rites of Passage Tattoo Festival, has leased suites A and B on level 3 of 159 Chapel Street in South Yarra.
The three-year lease on the 591 sq m space was struck at $350 a sq m.
AEG is planning to use part of one of the offices as a recording studio for podcasts. The deal was negotiated by Fitzroys agent Lewis Waddell.
A hotel on the outskirts of the city has sold for $15.8 million just six months after it opened.
A Melbourne-based investor bought the Mercure Pakenham on a sharp passing yield of 5 per cent and a 20-year lease. The three-storey 64-room hotel is on a 3500 sq m parcel of land next door to the Cardinia Club, at 77 Racecourse Road.
Stonebridge Property Group’s Rorey James and Kevin Tong ran the campaign as part of its National Investment Sales portfolio, along with Wilson Property’s Ben Wilson and Emma Dunne.
“It was at the upper end of pricing for properties offered within our portfolios, and with continued interest-rate hikes, buyers at this price point have been particularly sensitive to the cash rate,” James said.
Records show the vendor was Sale-based Retreat Holdings, which also recently built and sold a Mercure Hotel in Warragul. The group is controlled by Brett Neilson and Garry Leeson, who not only build the hotels but also operate them under franchise from Mercure’s owner Accor.
The owners of textiles wholesaler Marco Fabrics are preparing to sell their headquarters of 30 years in East Hawthorn.
The 1090 sq m double-storey building at 157 Auburn Road is just south of the Burwood Road intersection on a 1037 sq m piece of land.
In the heart of a blue-chip office and retail precinct, it is being sold vacant, or with a short-term lease back. Marco’s Paddington showroom in Sydney is also relocating.
The Hawthorn property goes to auction on March 3 through Colliers agents Ben Baines and Alex Browne. It is expected to fetch more than $5.5 million.
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