Heritage hassle holds up cosmetic giant Mecca’s flagship store

Newmark Capital, which bought the building in 2020 for $121 million, had told Capital Gain in March that fit-outs were expected to be completed in the last quarter of the year. The timeline for opening is now the first quarter of 2025.

While some work permits have already been issued, Heritage Victoria must sign off on any variations. The hold-up means Mecca’s and Rodd & Gunn’s new flagship stores will miss the Christmas shopping season.

Mecca has applied to Heritage Victoria to build a “Meccaversity,” a 150-seat pod installed on the first floor of the north-facing front of the old David Jones menswear shop.

The art deco heritage-listed building, designed by architect Harry Norris, was constructed between 1929-1938 as the GJ Coles flagship store.

Level one, earmarked for Mecca’s pod, was the legendary Coles Cafeteria, which was decorated with art deco features in the Mexican style.

While many of the building’s features were removed after DJs bought it in 1986, the first floor has significant heritage-listed tiles and ceilings.

Mecca’s pod is designed to be inserted into the space, suspended by thin rods through the ceiling. It will be an educational space for Mecca’s staff and customers and has enough room for 120-150 seated people or up to 200 standing.

Documents lodged with Heritage Victoria indicate there are concerns about how much of the remnant features will be covered up by the pod, with Mecca tweaking its design to allow more of the ceiling to show.

Dream’s over

Developer Landream has sold its Melbourne Central adjacent office building, anchored by Hungry Jacks, for more than $60 million.

It’s a sensational deal for the CBD that has recorded barely a handful of major deals in the past two years, with falling property values putting the brakes on transactions and listings.

Records show a caveat was recently slapped on the property by Yulong Investment’s Yuefang Zhang.

The Mongolian-born Zhang has been in Australia since 2013 and owns a stud farm based in Nagambie. His horse, Treasure the Moment, won the $1 million Group 1 VRC Oaks on Thursday.

The deal closely follows another fresh sale in the west end, with a car park at 380 Queen Street, on 3.2 hectares near the Queen Victoria Market, fetching $115 million.

Listed Malaysian investor Sime Darby has bought the 550-bay car park from the Singaporean Lim family, who paid $9 million in 1991.

Cushman & Wakefield agent Oliver Hay, who did both deals with Leon Ma and Daniel Wolman, declined to reveal the exact price or confirm the buyer of the Elizabeth Street building but revealed the sale represented a sharp passing yield of 4.53 per cent.

The 5680-square-metre office at 368 Elizabeth Street, on the corner of La Trobe Street, is on a 1518 sq m parcel of land. Unlike many CBD B-grade buildings, it is mostly occupied, but the leases contain clauses that allow for redevelopment.

Landream paid $36 million for the six-level building and flagged plans for an 83-level skyscraper on the corner site but struck problems with the aviation regulator over its height.

It was once half-owned by the Australian Council of Trade Unions. In 1970, the year after then-prime minister Bob Hawke became ACTU president, Bourke’s Department Store was built on the site to provide union members with cheap goods.

It was a dismal failure and closed in 1981. But the west end of the city is now a thicket of office towers and private education operators. The new residential towers going up in the Queen Vic Market precinct are adding to the street’s busyness.

Landream, which once had a $2 billion development pipeline, recently sold another market precinct property to Brookfield Asset Management for $61.25 million.

The Asian-backed developer had paid $49.5 million for the 1693 sq m site, which will be redeveloped as a 39-level student housing tower.

Strata investor

Investor Brendan Sullivan has sold the penthouse office at 271 William Street, on the corner of Little Lonsdale Street, for around $2.65 million.

Appropriately for the legal precinct, the buyer of the level 12 office is a local law firm.

Cushman & Wakefield agent George Davies, who did the deal with Anthony Kirwan and Jeff Ha, said 13 groups inspected the freshly renovated property which sold at $7000 a sq m.

The 381 sq m office had long been occupied by David Ross Chambers, which has moved to 546 Lonsdale Street.

Infill sites

Anthony Wilson’s investment group Terraplex has snapped up a 10-unit industrial development in Noble Park for $44.6 million from Lendlease.

Terraplex then on-sold three of the units before last week’s settlement at a 44 per cent premium to the purchase price.

“We could see the value straight away. So while the yield was a bit firm, the rents were about 20 per cent below market rates, and our intention was always to sell – we bought wholesale and sold retail,” Wilson said.

The 22,084 sq m development at 450-466 Princes Highway is on a 4.04-hectare Commercial 2-zoned parcel of land and has been placed into Terraplex’s oversubscribed New Opportunity Fund.

JLL’s Jack Kelliher, Ben Hegerty and Joel Scully did the deal.

Developers are chasing infill suburban industrial properties that can be demolished for new projects.

One property at 21-25 Vesper Drive in Narre Warren has sold on an extraordinary sub-1 per cent yield to a developer planning to build a new mini-estate.

The 3865 sq m property fetched $4.4 million through Jones Real Estate’s Dan Hannebery and Paul Jones.

Centennial has also acquired an infill site for redevelopment, paying $44 million for a 5.98-hectare site at 8 Dunlop Court, Bayswater.

Two factory warehouses on the site earn about $1.8 million a year giving the deal a 4.1 per cent yield. Centennial is planning to embark on its redevelopment in 2027.

JLL’s Scully and Hegerty, along with Cushman & Wakefield agents Chris Jones and Charlie Holmes, negotiated the transaction.

Still in the south-east, another infill property is for sale at 592-600 South Road, Moorabbin.

The two-hectare plot of land includes an 11,057 sq m warehouse, which is expected to fetch more than $20 million.