Kew sale a bright spot in depressed office market

A property investment syndicate has snapped up a trophy office building in one of Melbourne’s most affluent suburbs, in only the fourth major office deal in the city this year.

The 2286 square-metre building

– at 85-87 High Street, Kew – is believed to have fetched the asking price of between $17 million and $18 million. It sits on an 1840 square-metre site and came with planning approval for a 10-level, 118-unit apartment building, with three levels of parking and ground floor cafe.

A caveat on the property indicates a string of entities is behind the purchase. However, Gorman Allard Shelton’s Peter Bremner, Tom Maule and Jonathon McCormack, who marketed the property with Vinci Carbone agents Joseph Carbone and Frank Vinci, declined to provide further details.

The vendors paid $9 million for the property in 2013, effectively doubling their money in what is a very solid deal in a depressed office market.

Other major metro office deals this year include Harry the Hirer founder Rick Jamieson’s $30 million purchase of 112 Trenerry Crescent, Abbotsford, and the $19 million acquisition of 2-6 Southampton Crescent, Abbotsford, by self-storage outfit Howzit My China. Rick Jamieson’s son Sam is also stepping up his property activities.

Jamieson junior’s $25 million Fitzroy apartment project, at 227 Napier Street, was given the green light this week. His property development business JMSN bought the site in 2022 for $4.5 million, and has received approval for a 10-unit development designed by Warren and Mahoney.

The six-storey building will be inspired by the streetscapes of London and Paris, Jamieson said.

Fitzroy’s gritty industrial streets have been transformed with apartments, including No.227’s neighbours, Milieu’s 231 Napier Street and Whitlam Place and Dealcorp’s CF Row.

CBD STRATA DEAL

Level three of 326 William Street has sold for $3.58 million in the biggest CBD strata deal of the year. The vendors, lawyers Brent Morgan and Geoff Handberg, from Rodgers Reidy, paid $1.87 million for the 532 square-metre office in 2009.

A new owner-occupier purchased the office, which is in a six-storey building on the corner of La Trobe Street, opposite the Flagstaff Gardens and near the legal district.

Rodgers Reidy is moving to newer, larger premises on level 11 of Dexus’ 385 Bourke Street.

Cushman & Wakefield’s Anthony Kirwan, George Davies and Jeff Ha negotiated the offmarket deal. It is the third transaction they have brokered in the building in the past 15 months, having sold level two for $3.5 million in May 2022 and the ground floor Chemist Warehouse for $3.62 million last year.

Coming up is a 434 sq m office at the other end of La Trobe Street, near RMIT and the State Library of Victoria. Level seven of 171 La Trobe Street is expected to fetch between $4 million and $4.2 million.

ASHWOOD OPPORTUNITY

The old Oceanic Seafoods site in Ashwood is back on the market with a $45 million price tag.

The 615 Warrigal Road mixeduse zoned property comes with a Peddle Thorp-designed permit for a five tower project of up to 10 levels, with a mix of townhouses, apartments, offices and shops – more than 87,000 sq m of space.

The site is between Holmesglen railway station and the Gardiners Creek reserve – close to Holmesglen TAFE and Chadstone shopping centre.

There are three warehouseoffice buildings on the site covering 7937 sq m and returning $420,734 a year in income. Leases expire in February 2024.

Stonebridge Property Group’s Julian White, Chao Zhang and Andrew Milligan are handling the listing, with Cushman & Wakefield’s Leon Ma, Marcus Neill, Oliver Hay and Daniel Wolman.

The property last changed hands in 2016 for $35.68 million.

BLUE-CHIP BRIGHTON

A NAB branch on the blue-chip retail strip in Brighton has sold for $7.15 million.

The property fetched $1.05 million more than when it last changed hands in 2019, reflecting a sharp 3.5 per cent yield and a land rate of $24,826 a square metre.

Fitzroys’ Mark Talbot and Tom Fisher handled the sale.

NAB has leased the shop at 35 Church Street for 30 years, and recently renewed it for a further three five-year terms. It returns $254,616 a year in income.

The next tests for the market include 736-740 Glenferrie Road, Hawthorn, which is leased to a Terry White Chemist and a Jetts Gym. Expectations are that the property will fetch between $9.5 million and $10 million when it goes to auction on August 31.

The 779 square-metre twostorey property is on 690 square metres of land and returns $536,578 a year in rent.

In Armadale, Fitzroys’ Chris Kombi and Lewis Waddell have listed 1014 High Street and are expecting more than $3 million for the 140 square-metre doublestorey shop. It is on 208 square metres of land and is leased to Nimble Activewear.

DANDENONG SOUTH

KM Property Funds, KordaMentha’s property arm, has purchased a Dandenong South warehouse for $16 million.

The acquisition was made with investment group Partners Private, which will establish a single-asset fund for its clients called KPMF Industrial 01.

The property at 43-55 Mark Anthony Drive – in the heart of the south-eastern industrial precinct – is leased to Quest Flooring until June 2026. KM Property Funds director of acquisitions Tom Korda said: ‘‘We look to protect our investors’ downside by buying close to or below replacement cost, and given construction costs are so high now, we see great value in buying existing built assets. The short three-year-lease term offers investors the potential to capture market rent growth in the medium term.’’

The 8386 square-metre warehouse is on 1.7 hectares of Industrial 2-zoned land. Records show the vendor paid $1.05 million for it in 2003. Cameron agents Kerri Skews and John Guastella marketed the property.