Goldfields sees riches in Punt Road rental homes

While Melbourne has plenty of BTR projects in the pipeline – making up more than half of all planned residential projects – many have been waiting on finance before they could go ahead.

There are 4650 BTR apartments due to be completed in the next 12 months, with an average of 4100 forecast each year for the next three years, according to property research house Charter Keck Cramer. The next stage of the cycle is likely to be sales of completed projects to investors and specialist operators.

With that in mind, Goldfields plans to flip the project after it’s finished in the middle of 2026. Transactions have been thin on the ground. Last year, Local Residential bought Golden Age’s Sky One tower in Box Hill.

US giant Hines could be in the market. The group has just paid $350 million for two completed BTR projects in Brisbane and is now offloading three development sites in Melbourne: 15–37 Bank Street in South Melbourne; 10 Ballarat Street in Brunswick; and 36-58 Macaulay Road, North Melbourne. CBRE is managing the sales and expecting up to $120 million for the three.

Goldfield’s project involves two 15-storey connected towers with a mix of apartment sizes, a rooftop pool, basketball court, dog park, gym, co-working spaces, cinema room, private dining, bar and lounge areas, and private lobby.

It’s on a 4350 square metre site on the corner of Raleigh Street and is due to be completed in mid-2026.

BTR is a new move for Goldfields, which has had success with its Chapel Street office tower and a string of suburban townhouse projects.

Ocean beach

Boutique Peninsula accommodation project the Carmel@Sorrento has changed hands for $10.15 million.

It’s only the second deal in 2.5 years on Sorrento’s Ocean Beach Road strip, and was done on a sharp net yield of 2.35 per cent which shows how hotly contested property is in the Sorrento Village.

The seaside town is the main shopping strip for the pointy end of the Mornington Peninsula, where Melbourne’s wealthiest denizens take their local holidays.

The Vavasis Family Group has bought the property at 142-146 Ocean Beach Road, which has seven apartments and three retail spaces.

“Our background is in development, and we understand the cost to build an asset like this. While the return is nominal, we see value in the asset due to the positive arbitrage in replacement costs and the upside in a future subdivision/sell down,” William Vavasis said.

Stonebridge Property Group’s Nic Hage, Rorey James and Kevin Tong did the deal.

Developed by the Five One Group in 2018, the apartments, shops and car parks cover 11 titles and returns $271,108 a year.

The last deal on the strip was Buckley’s Corner at 172-174 Ocean Beach Road which sold at auction for $6.7 million in March 2022 on a yield of 2.4 per cent.

Fox and friend

Perth-based property investor Ascot Capital is offloading a $15 million portfolio of Petstock shops it bought in 2022, including an outlet on High Street, Prahran.

Ascot Capital co-owns the 476-478 High Street building with Fox Car Holdings, a company set up by Linfox board member David Fox, son of transport mogul Lindsay Fox.

The property, near the corner of Williams Road, is on a 1206 sq m site zoned Commercial 1 which has redevelopment potential.

As an investment, it returns $217,350 a year in rent and will likely fetch around $10 million, given local property values. There hasn’t been much uplift since they bought it. Records show they paid $10.2 million in June 2022.

The other four Petstock shops include an outlet in Cohuna, owned by Ascot alone and three others in Queensland and New South Wales.

Ascot Capital made a motzah in 2021, selling Perth’s Jandakot Airport and a surrounding logistics estate to Dexus for $1.5 billion and another office and logistics portfolio to GPT for $687 million.

At the time, Ascot was reportedly working with Petstock on the rollout of more than 20 stores. A year later, Woolworths bought a 55 per cent stake in Petstock, for $586 million.

The Prahran property goes to auction through Burgess Rawson’s portfolio auction at Crown on December 11, with the other four going under the hammer in Sydney the day before. Burgess Rawson’s Darren Beehag is handling enquiries.

Car delivery

Luxury car dealer Dutton Wholesale will be the anchor tenant for a new speculatively built industrial precinct at Max Beck’s and Lindsay Fox’s Essendon Fields business park.

Dutton Wholesale, a division of Dutton Automotive, will use the new building to store and deliver cars to its dealers around the country.

Stage 1 of the Hart Precinct covers more than 13 hectares and is 50 per cent leased. The 5134 sq m warehouse and 503 sq m office is on a 9879 sq m site at I Challenger Court.

Modscape, which is moving into a 20,000 sq m facility nearby, is also opening in the new estate. Construction on a 10,600 sq m facility for Autex Acoustics is under way.

Essendon Fields already has a large specialist auto dealership precinct, and Dutton Auto recently moved into a new showroom along the freeway.

Property giant

Canadian property giant Brookfield Properties has also dipped its toes into the industrial sector. While never the sexiest of the investment sectors, industrial property is a crucial part of the economy.

Those big sheds lining the freeways store and distribute the stuff which is now delivered straight to the front door, as well as the supermarket shelves.

Brookfield is developing the $600 million 185,000 sq m Cardinia Logistics Estate on land it bought in 2022 at 60 and 130 Greenhills Road in Pakenham on the city’s south-eastern fringe. Records show Brookfield paid $44.64 million for the site.

The estate will offer 32 warehouses ranging in size from 1500 sq m to 20,000 sq m, targeting small to medium businesses looking for last-mile warehousing and manufacturing facilities.

It has access to a suite of transport routes in the south-east, which already service the more expensive Dandenong South market.

Brookfield’s development vice president, Will Green, said tenant costs in Pakenham of about $25-a sq m are about half those in Dandenong South.