Economy

GARDA Abandons Struggling Melbourne Office Market

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“There is less competition from the traditional investor market. Eight out of 14 office transactions over $5 million in 2023 have sold to owner-occupiers,” JLL’s Carr said.

The GARDA deal was the fourth-biggest of the year.

“Concerns remain about the depth of tenant occupier markets, as well as the escalating cost of debt environment that is stalling the flow of transactions,” Rutman said.

Richmond

The owner-occupiers keep on coming. A Sydney business has nabbed a warehouse at 45-47 Coppin Street, Richmond, for what is understood to be around $5.7 million.

The deal was done on a sharp 30-day settlement, with the buyer planning to move its Melbourne operations into the space.

The Coppin Street property, south of the Bridge Road intersection, includes two historic office-warehouses with a modest fitout on a 748 sq m landholding. Pitch Architects were the most recent tenant.

Stonebridge Property Group agent Dylan Kilner, who did the deal with Max Warren and Shawn Luo, said five property inspections came from interstate groups, with two of them presenting formal offers. They declined to comment on the price.

Kilner said the property had a potential seven-level development height but “developers were nowhere to be seen”.

At the other end of Bridge Road, near the Epworth Hospital, a three-storey Victorian-era complex of three shops and eight apartments fetched $5.39 million at auction – a 15 per cent premium to their reserve.

While the result was better than expectations, it revealed how hard the past 10 years have been for Bridge Road property investors. Records show the vendor paid $5.35 million for 37-43 Bridge Road in 2014.

The auction was handled by Stonebridge’s Nic Hage, Rorey James, Sarah Xi and Kilner, with the local buyer sourced through its Asia practice team. The 1100 sq m building is on a 520 sq m parcel of land.

A three-storey Victorian-era complex of shops and apartments at 37-43 Bridge Road fetched $5.39 million at auction

Industrial benchmarks

Industrial property developer and investor ESR Australia has secured logistics and sensitive freight provider PFM Corp for a new $45 million spec-built warehouse at its $750 million Green Link business park in Cranbourne West.

PFM has signed a 10-year lease on the 15,400 sq m, 5-Star Green Star rated warehouse at a rate which is understood to set new benchmarks in the south-eastern industrial market.

CBRE agents David Aiello and Sasan Misaghian, who brokered the deal for ESR Australia, said future rents in Cranbourne would exceed $150 a sq m by the time the property is completed in September 2024. At that rate, PFM’s estimated rent is likely to come in at about $2.3 million a year.

ESR, the local subsidiary of Hong Kong-listed logistics landlord ESR, bought the 79 hectare parcel of land at 590-620 Western Port Highway in 2020 for around $80 million. It is aiming for eight-to-10 facilities on the estate, which will boast strong eco credentials. Other operators at Green Link include CEVA Logistics, JAS Forwarding worldwide, InterCentral Logistics and TW Logistics.

Emerald Place

Residential developer Lowe Living is offering two floors of strata-office space at its new South Melbourne project, Emerald Place.

The 36-unit apartment building, at 188-200 Clarendon Street, will offer 3000 sq m of office space on levels one and two of the new building, which has been fast-tracked through planning.

The project is a joint venture with ICON Developments, which was bought by Japanese-owned Kajima Corp. in 2015.

Records show the joint venture settled on the property last month, paying $29.5 million for the 2563 sq m site on the corner of York Street.

Two of the 12 spaces have sold, including one to Lowe Living, which will move its headquarters into the building.

Cushman & Wakefield agents Anthony Kirwan, George Davies and Jeff Ha are marketing the offices.

Kirwan said prices range from $12,500-$13,000 a sq m, depending on position and size. The corner offices have balconies.

The offering comes as Time & Place won approval from the City of Melbourne to turn the Lindrum Hotel, on Flinders Street, into a strata-office project, with 21 spaces for sale at $18,000-19,000 a sq m.

South Melbourne is still popular with investors. Around the corner, at 305 Coventry Street, five bidders competed for a Market Lane freehold at auction during the week.

The local buyer, one of three sourced from Stonebridge’s Asia practice group, paid $1.42 million for the double-storey shop, reflecting a yield of 3.41 per cent and a land rate of $30,318 a sq m.

Stonebridge agents Hage, James and Xi handled the deal.

(The following story may or may not have been edited by NEUSCORP.COM and was generated automatically from a Syndicated Feed. NEUSCORP.COM also bears no responsibility or liability for the content.)

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