Vic Health Minister cashes in on commercial property boom
Victorian Health Minister Martin Foley has cashed in on rising commercial property values on Melbourne’s fringes after a building he and his family has a beneficial interest in sold for more than $1 million above expectations.
The vacant, two-level office building at 5 Main Street in Mornington on the Mornington Peninsula sold before auction for $4.855 million to private investor Rodney Kagan, founder and co-chairman of private equity-backed outsourcing firm Probe Group.
Selling agent Jamie Stuart of Nichols Crowder told The Australian Financial Review he had quoted an expected selling range of $3.5 million to $3.7 million for the 590 square metre building just 200 metres from the beach.
“This was based on another property at 1 Main Street – the former cinema – selling a month ago for $3.72 million with vacant possession. It’s a similar-sized building [to 5 Main Street] on a larger land area,” Mr Stuart said.
“The commercial property market on the peninsula is particularly strong. There is minimal vacancy on Main Street.”
The property was offered for sale by Courtside, whose ultimate holding company is Watsons Properties. Corporate records show ownership of Watsons Properties is split between Mr Foley and Timothy Fallaw.
Mr Foley’s late father was a long-time director and managing director of property consultancy Watsons, which previously occupied the 5 Main Street premises.
It had been owned by controversial developer John Woodman before he sold it to Marshal Melbourne, owned by his son Heath Woodman, a former director of Watsons.
“More than 30 years ago, my father and his business partner purchased 5 Main Street in Mornington,” Mr Foley said in a statement.
“When my father died in 2007, this property formed part of his estate, in which I acquired an interest in accordance with the terms of his will.
“I receive a disclosable interest from the estate from Dapat Pty Ltd, which has been declared on the pecuniary interest register since I first became a member of Victorian Parliament.”
Mr Kagan told the Financial Review he saw potential to convert the building into retail space on the lower floor.
“The position is fantastic. It’s right in the heart of Main Street, where all the development going on. It’s a really huge growth area,” he said.
“The initial offer I lobbed in was beaten by somebody else, so I came back with a higher offer and was successful.”
Mr Stuart said: “Since November 2020 we’ve seen dramatic take-up of premises for lease with minimal incentives being offered.
“In contrast to other parts of Greater Melbourne, this shows the continual resilience of this vibrant part of the Mornington Peninsula, and why we’ve seen strong demand growth together with record sale prices being achieved for our clients.”
