Fitzroy sets a new standard with hotel chain

The “anything but standard” Standard Hotel started in Los Angeles on the Sunset Strip 20 years ago but closed this year due to rising rents. A familiar story.

The new Melbourne hotel is one of seven in the international pipeline, including Porto, Lisbon, Brussels, Hua Hin, Bangkok and Singapore. Existing hotels operate in New York, Miami, London and the Maldives.

DealCorp’s David Kobritz bought the Rose Street site in 2018 and expected to build apartments but after mentioning the purchase to hotel consultants soon found it changed its purpose.

There isn’t much accommodation in Fitzroy but the numbers stacked up, Mr Kobritz said.

Woods Bagot has designed the $60 million 127-room hotel. Construction is expected to start mid-year and be completed by 2023.

“Hopefully in the next year or two, we’ll be travelling again and welcoming international visitors. But even local interstate travel has skyrocketed,” he said.

“It will be grungy, it will have that industrial Fitzroy feel but will be modern inside,” he said.

Standard International chief Amar Lalvani said in a statement that “the Fitzroy neighbourhood in Melbourne represents exciting new territory but at the same time feels totally familiar.”

Office service

Servier Laboratories’ East Hawthorn digs are the second major suburban office investment to hit the market this year.

Servier had the two-level office at 8-10 Cato Street purpose built in 2001. The 3700 sq m office also includes a warehouse off Cato Lane and an 1130 sq m carpark at 10 Cato Street.

That brings the total landholding to 3381 sq m – an increasingly rare offering in highly-sought after Hawthorn.

CBRE agents Scott Orchard, Tom Ryan and JJ Heng are handling the expressions of interest campaign. It’s expected to sell for more than $22 million.

Mr Orchard said the property is offered with a short-term leaseback and offered re-positioning potential for investors, value-add for owner-occupiers and development potential.

The Strand

There’s plenty of doom and gloom written about CBD shop vacancies but ISPT is using the situation to turn its 15-shop arcade, The Strand, into a beauty precinct, snaring specs retailer Henderson Optical from Emporium.

The Elizabeth Street arcade adjoins Emporium’s ground floor and boasts the CBD’s only COS outlet. Other boutiques include Ontisuka Tiger, ACNE, sneaker retailer Asic and Rag & Bone.

Henderson has taken four shop spaces, leaving just three vacancies in the arcade.

“We found the CBD is missing a well thought out health-beauty-wellness precinct so we’ve embarked on a strategy to create the city’s best beauty hub,” ISPT leasing manager Melanie Green said.

Ainsworth Property agents Zelman Ainswoth, Josh Luftig and Tan Thach are handling the leasing.

Bunnings’ parcel

Hardware behemoth Bunnings is offloading a 13,800 sq m parcel of land in Mill Park behind its Plenty Road store.

It’s understood the land at 18 Bush Boulevard was originally intended as expansion space for the Bunnings but a newer store was instead built further up Plenty Road in Mernda.

Gorman Commercial agents Jonathon MacCormack and Stephen Gorman are running the expressions of interest campaign which closes on May 26. The land is expected to fetch more than $7.75 million.

Property at the busy Mill Park town centre is highly prized. The Bunnings was bought by investor David Feldman in 2009 for $16.2 million. More recently, a medical centre leased to Melbourne Health sold for $9.045 million.

Woolies Metro

In other retail investment news, Pace Development Group is off-loading a new Woolworths Metro supermarket at the foot of its recently completed 79-unit Ascot Vale project.

The 1894 sq m store at 327-357 Mount Alexander Road is the largest of Woolies’ metro formats and includes three specialty shops.

It comes with a newly-signed 12-year lease and returns a total $902,682 a year in rent.

The centre is next door to the Woolworths-owned Dan Murphy’s bottle shop and covers 2300 sq m of space plus 64 basement carparks.

Stonebridge Property Group’s Justin Dowers, Rorey James and Kevin Tong and JLL agents Stuart Taylor, Tom Noonan and MingXuan Li are running the expressions of interest campaign. It’s expected to sell for more than $17 million.

Goldfields fund

Developer Goldfields has revealed ambitions to create a retail investment fund while splashing out $30 million on town centre sites in the region and outer suburbs.

Goldfields is planning a $150 million mixed-use project for a 4.7 hectare site in Kenning Road, North Tarneit which it has bought for around $16 million.

Post-Covid, house and land sales are running hot on the urban fringe and Goldfields is cranking up the retail and services which are urgently required.

The Kenning Road town centre plans include some medium-density townhouse lots, a petrol station, a 7000sq m shopping centre with supermarket, medical and gym facilities and a childcare centre.

“With demand for land across Melbourne’s outer suburban growth areas at near-peak levels and showing no signs of slowing, we expect the need for innovative retail commercial space in those areas will be realised much sooner than was originally anticipated,” Goldfields’ chief operating officer Lachlan Thompson said.

Auction action

A first-time international investor has beaten six other bidders to nab the Port Melbourne NAB bank branch at 231 Bay Street.

About 80 people turned up to the auction of the 252 sq m branch which sold for $3.86 million on a 3.65 per cent yield.

It’s a remarkable result given the bank has only two years remaining on its lease.

CBRE agents Nathan Mufale, Alex Brierley, David Minty and JJ Heng handled the auction.

They recently had six bidders competing for the Mr Majestic cafe at 40 Hall Street, Moonee Ponds which fetched $1.575 million.

The next major test of the market will be the executor’s auction of 13 Church Street, Brighton, where healthy local shopping keeps vacancy levels low to non-existent.