Investors embrace bricks and mortar amid global instability

A Melbourne-based Malaysian investor splashed out $9.2 million for a tiny Swanston Street restaurant at a lunchtime auction on Thursday.

The price, stoked by eight bidders, represented a record building rate of $70,769 a square metre; a land rate of $82,882 a sq m and a pointy yield of 2.13 per cent.

CBRE agent Julian White, who marketed the property with Alex Brierly, Nathan Mufale and Chao Zhang, said: “It’s a clear sign that despite everything that’s going on, bricks and mortar are a very popular asset class.”

“It’s a great sign of confidence to have that many bidders competing for the property,” Mr White said.

The two-storey 130 sq m restaurant is leased to New Taipei Juicy Dumpling and Noodle House. It’s on a 111 sq m pocket handkerchief square of land next to the McDonalds.

It had been held in the same family for 70 years.

The last building to change hands on the strip was an eight-level 1930s building at No. 123 which fetched just under $16 million in 2015 on a 2.75 per cent yield.

City freehold is in high demand. Late last year, the former OPSM building at 384 Bourke Street sold for $22.5 million on a tight 2.6 per cent yield.

Likewise in Prahran, investor behaviour indicated bricks and mortar may be regarded a haven amid global instability and flailing stock markets.

The workshop of A.W. Hinton soared $1.235 million – or 22 per cent – above the reserve to sell for $6.635 million.

Six bidders competed at the auction, handled by Gross Waddell agents Michael Gross and Andrew Waddell.

The fourth-generation business A.W. Hinton and Sons, had operated out of 49-51 Izett Street for 130 years. Now panel beaters, the business started in 1890 as coach-builders.

Target Geelong

A year after taking the plunge into the Geelong market with the purchase of the Target headquarters, Melbourne-based Leaf Corporation has leased more than 11,000 sq m of the property to disability support group, Gateways Support Services.

Leaf Corporation has leased an 11,000 sq m property to autism support group, Gateways Support Services.

Gateways has signed up for 11,108 sq m of the 12-14 Thompson Road office in a 10-year leasing deal brokered by Colliers and Teska Carson agent Steven Fein.

While the rent was not disclosed, it’s understood to be around $200 a sq m net – a price which effectively quadruples the value of the property.

Leaf Corp paid $10.6 million for the 37,740 sq m site in early 2019 and late last year paid another $3.4 million for No.6, a 9275 sq m land holding at the rear of the Sphinx Hotel.

The well-established Gateway group was looking for office space for about 200 people with room for a gym, cafe and community gardens.

It was also looking for space to provide state-of-the-art therapy and recreation facilities for its clients and a suite of catering, hospitality and packing facilities to support life skills and job training.

Barkly House

Donna Guest, the owner of the Blue Illusion fashion retail chain is selling a St Kilda office building.

Donna Guest is selling a St Kilda office building at 30 Inkerman Street.

Barkly House, at 30 Inkerman Street, is around the corner from Blue Illusion’s head office on Inkerman Grove and close to the Barkly Street intersection.

The Guests paid $6 million for the three-storey office building in March 2015. The 1600 sq m office is on a large 950 sq m site and returns net income of $290,000.

It’s going to auction on April 8 through CBRE agents Rorey James, Scott Orchard, Scott Hawthorne and JJ Heng in conjunction with Wilson Commercial’s Adam Guest. It’s expected to fetch more than $6 million.

The fringe office markets were smoking hot last year. So far, CostaFox has splashed out $28 million on the empty heritage building, Tea House, at 28 Clarendon Street, South Melbourne.

Boss’ daughter

Speed racing champion and motorbike collector Rod Hunt snapped up the Boss’ Daughter cafe in Sorrento on the weekend, paying $2.55 million for the 174 Ocean Beach Road freehold.

Speed racing champion and motorbike collector Rod Hunt snapped up the Boss’ Daughter cafe in Sorrento.

The result, $250,000 over the reserve, represented a yield of 3.9 per cent and a record land rate for Sorrento of $11,00 a sq m, well past the $9500 a sq m achieved by the 2018 sale of the Country Road store in 2018.

The 232 sq m landholding was sold by Fred and Pam Dijkgraaf who had run the Buckley’s Chance restaurant out of the space since 1982.

Their daughter Tessa Dijkgraaf opened The Boss’ Daughter cafe in December 2018 and has a new five year lease paying $104,000 a year.

CBRE agents Rorey James, Mark Wizel, Nic Hage and JJ Heng managed the campaign.

Mr James said five bidders competed in the auction and six others, who had registered to bid, didn’t even get the chance to raise their hands.

The next Sorrento property to hit the market will be 854 Melbourne Road, which CBRE is auctioning a week before Easter on April 4.

The Commercial 1-zoned 857 sq m site is on the corner of Tayton Place and has a permit for a three-level retail and apartment project.

For those with deeper pockets, the Continental Hotel is back on the market after the Supreme Court nixed a deal with LBA Capital. Colliers International agent Guy Wells has the listing.

Footy giants

The Docklands office of grand final football team the GWS Giants has changed hands for $435,000.

Fitzroys agents Samuel Friend and Stephen Land sold 101/198 Harbour Esplanade to investor Paul Del Papa on a 6.2 per cent yield.

Mr Friend booked more than 60 inquiries about the office which looks out over the harbour with views to the Bolte Bridge.

Naturally, it’s close to AFL House and the Docklands stadium.

The Fitzroys agents leased the office last year on a three plus three year deal paying $35,000 a year.


The freehold to Carlton’s beloved long-running toy shop, the Poppyshop, is up for auction on Friday.

283 Lygon Street is expected to fetch more than $1 million.

The double-storey Victorian terrace covers 120 sq m at 283 Lygon Street, near the Faraday Street corner and is expected to fetch in the high $1 million range.

The Poppyshop has been on site for more than 50 years but nearly closed several years ago when longtime owner Pat Knox retired.

The shop, marketed by TeskaCarson agents Fergus Evans and Adrian Boutsakis, comes with a five year lease to the Poppyshop dating back to October 2019 and two five-year options.

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