City strata office on the market

Some of the individual suites are as small as seven square metres and are leased to a host of services providing nail, hair and massage.

Level three is leased to a language school and has a special 9b rating, while the whole of level seven, leased to the D-Soul Dance Studio, is owned by Pusey.

Pusey, who once ran a property investment scheme, paid $823,000 for the 130 sq m floor in 2012.

Gross Waddell ICR agents Glenn Ye and Alex Ham have spent months trying to get all the owners together, but a couple pulled out at the end. Ye is hoping for up to $10,000 a sq m for the floors.

Back on market
The striking office building once occupied by bankrupt property developer Anton Wilson’s Mider group is back on the market.

The four-storey building at 21 Yarra Place in South Melbourne was designed by Hayball Architects and is opposite the popular St Ali Coffee cafe.

On a tiny 166-square-metre block, the 588-square-metre office also comes with eight car parks. While it has been more recently leased to advertising firm, Caramel Creative, it is being sold with vacant possession.

Records show Anton and Melinda Wilson sold the building to Alan Fisher, the fourth-generation supermarket owner who sold the family business to Ritchies for more than $20 million in 2015.

Fisher paid the Wilsons $4.2 million for the building in July 2017, just as Mider, which was headquartered at 21 Yarra Place, collapsed, owing $61 million.

In March this year, the Australian Securities and Investments Commission banned the Wilsons from being directors or managers of companies for five years.

Colliers agents Oliver Hay, Alexander Leggo, Anthony Kirwan and Daniel Wolman are taking the property to auction on December 15. It’s expected to fetch more than $4.5 million.

It’s the second property Fisher has sold in South Melbourne this year.

Records show he sold 343 Clarendon Street, leased to Jessi Singh’s hospitality group, in June for $3.9 million. Colliers did that deal too.

South Melbourne’s fringe office market has boomed in the past five years with the Deague Group’s 101 Moray Street and Hickory’s 68 Clarke Street triggering a wave of new building.

However, rising interest rates and a fear of sliding property values are starting to thin out the ranks of investors.

Two other South Melbourne buildings – 10-12 York Street and 30 Tope Street – sold after auction for $3.9 million and $2.55 million respectively.

While they achieved their targeted sale prices, multiple bidders were not there to push up the prices.

Rochelle House
At the other end of Bourke, the penthouse and rooftop at Rochelle House is for sale.

Colliers agents Matt Stagg, George Davies and Anthony Kirwan are handling the mid-December auction.

Records show the Adelaide-based vendor paid $813,000 for the fifth floor in 2002. The office covers 217-square-metre and the rare on-title rooftop, a further 150-square-metre. It’s expected to fetch more than $2 million.

Rochelle House, at 415 Bourke Street, is squeezed between NAB’s new midtown headquarters and the old Kozminsky building on the corner of McKillop Street, which has been leased to the Hopetoun Tearooms.

On the other side of McKillop Street is Cbus’ 60,000-square-metre new office tower at 435 Bourke Street.

Shop deal
One result in the CBD’s eastern precinct, bordering Chinatown, was more reminiscent of bumper past times but only just.

V-Leader is understood to have paid more than $50 million for seven shops, including the former Continental Hotel on the corner of Russell and Lonsdale streets on a yield of about 1 per cent.

Super low yields indicate the capital value of a property is worth more than its rent and is expected to go higher.

However, records show the vendor, Andrew Yu’s Longriver, paid $49.2 million for the 1137 sq m site in 2019. Colliers’ Oliver Hay, Leon Ma, Daniel Wolman and Stagg managed the 157-173 Lonsdale Street transaction.

In the CBD’s west end, the Chemist Warehouse on the ground floor of 326 William Street sold under the hammer for $3.62 million on a 5.3 per cent yield.

A medico beat four other bidders for the 390-square-metre strata shop on the corner of La Trobe Street opposite the Federal Court, the Flagstaff Gardens and Flagstaff railway station.

Records show property developer and jazz fan Albert Dadon paid $4.81 million in 2015 on a 3.95 per cent yield.

Colliers agents Kirwan and Davies and Stonebridge’s Max Warren and Chao Zhang handled the auction.

Troon strikes
Regional developer, the Troon Group, has snapped up a Ballarat development site that has been earmarked for a Large Format shopping centre.

Records show Troon recently settled on the 3.37 hectare property, paying $10.13 million.

The site at 331 Glenelg Highway, Smythes Creek, adjoins the Delacombe Town Centre which Troon developed and sold a year ago for $112 million.

Shopping centre behemoth, SCA Property Group bought the 19,098 sq m subregional shopping hub on a yield of 5.34 per cent.

Earlier in 2021, Troon sold the nearby Ballarat Lifestyle Centre at 29 Cherry Flat Road for $12.39 million to Melbourne investor Adrianus Verhagen’s Bal Ed. The 3665 sq m centre is on an 11,710 sq m site.

In the most recent deal, CBRE agent Ryan Arrowsmith represented the vendor and Colliers agents Mike Crittenden and Tim McIntosh acted for Troon.

The large format market has done well during the pandemic when lockdowns, working from home, and the building boom triggered by the Morrison Government’s building grants, prompted more spending on home furnishings.

While sales volumes are well down across most retail investment markets, large format is powering ahead with Colliers research recording 14 deals worth $1.3 billion nationally – a 30 per cent increase compared with last year.