Two Melbourne CBD properties to test investor appetite

5 days ago 3

The Sisters of the Good Shepherd are off-loading one of their quietly held investment properties, Stalbridge Chambers, at 443 Little Collins Street.

Records show the Sisters’ investment vehicle, Denison Rights, bought the building 30 years ago for $3.7 million and could be looking at an $18 million-plus sale.

The distinctive eight-storey building, on the corner of Bank Place, was designed by Twentyman & Askew – the architects behind the Block Arcade – in 1891.

The 2583-square metre building includes 35 offices and six shops, and returns about $530,000 a year in income; fully leased, it could command up to $955,000.

The building’s recent transaction history is a telling illustration of Melbourne property cycles.

In 1988, it sold before auction for $6.2 million. By 1993, in the depths of the recession, it passed in for $3.6 million at an auction held by the liquidator of the mortgagees – the Geelong-based Pyramid Building Society and Farrow Properties, which had collapsed in spectacular fashion.

Good Shepherd Services are reportedly planning to pump the proceeds of the sale into their mission, which helps women, children and families. It provides housing, counselling and no-interest loans.

Cushman & Wakefield’s Daniel Wolman, Oliver Hay, Anthony Kirwan and Leon Ma, and Gorman Commercial’s Stephen Gorman and Peter Bremner have the listing.

Elsewhere in the CBD, the Zagame family has put the Garden State Hotel up for sale but without a price guide. The move will certainly prove a test for the city property market.

The Garden State Hotel at 95-101 Flinders Lane.

While listed pub giant Australian Venue Co runs the popular hotel, records show the fund’s original head lease on the property had a 2301 expiry date. Quite a long-term vision.

Values on the block of Flinders Lane behind 101 Collins Street are skewed by attempts by the tower’s owner, the Commonwealth Superannuation Fund, to control any potential developments that could obscure its views.

The fund has already clipped the height potential of the Garden State Hotel at 95–101 Flinders Lane which could limit a peak price. Last month, an office at No.107-109 sold for $14.8 million, just shy of the $15 million the fund paid for it in 2015.

A similar price is expected for the newly listed 103-105 Flinders Lane. However, none of them are pubs which can run on entirely different metrics. Records show the Zagames paid $5 million in 2007. The former factory was turned into a restaurant in the late 1980s.

Old Salvos’ suburban haunt shines

A wealthy Liechtenstein family has snapped up the old Salvos headquarters in Mont Albert in a fresh sign of renewed investor interest in the city’s office market.

Venncap, acting for the Hilti Family Office, is paying $24.5 million for the three-storey office at 3-7 Hamilton Street.

The fully leased 3508-square metre office returns $1.75 million a year in income and is the first major office to change hands without stamp duty under the Victorian government’s new Commercial and Industrial Property Tax.

The levy will replace upfront stamp duty with an annual 1 per cent land value-based tax starting 10 years after the purchase date. The expressions of interest campaign, run by Lemon Baxter’s Thomas Blencowe, Paul O’Sullivan and Hans Fan, attracted six bids.

Local investment house Forza had paid $15.5 million for the empty office in July 2024, immediately after the introduction of the new scheme. The then vendor, the Hargrave family’s Larkfield, had paid $27.85 million in 2021.

Offices back in play

At nearby Camberwell Junction, the Lemon Baxter team, under instructions from Advise Transact, is selling 695 Burke Road for Dealcorp, an office it has held for 30 years.

Records show Dealcorp boss David Kobritz paid $1.6 million for the office at a time when the property market was in a deep trough.

The 3500-square metre building is on a 1115-square metre site and is 80 per cent leased. It returns about $925,000 a year and could fetch more than $20 million.

Closer to the city, an empty Richmond office is back on the market. The three-level building at 1 Salisbury Street was previously leased to children’s services charity, Berry Street.

It last changed hands for $7 million in 2010 and hit the market in 2023 with an asking of $13 million, recently reduced to $9 million.

The 1873-square metre property was built in 2003. It’s on 1418 square metres of land off Church Street, between Highett and Victoria streets.

Gorman Commercial agents Peter Bremner and Jonathon McCormack have the listing, along with LDB Property’s Owen Day and Scott Raglus.

Development sites galore

In the Dandenong foothills, a 7.55-hectare parcel of land at 29 Norvel Road, Ferntree Gully, is on the market with its Chinese vendors expecting a $60 million payday.

The property has a permit for 138 lots. Cushman & Wakefield’s Joe Kairouz, Hamish Burgess and Leon Ma are selling the former quarry site which last changed hands in 2016, reportedly for $40 million.

In Northcote, Cushmans and Four Leaves Property’s Linda Sharky and Max Mahoney are also marketing a StoreLocal self-storage centre at 150 Arthurton Road near the Darebin Creek.

The 5190-square metre site comes with an approved plan for a seven-level project. The vendor, EG Funds, paid $13.45 million in 2016 and is expecting about $20 million.

In South Melbourne, entrepreneur Matt Bailey, from The Bailey Boys, is selling a site owned by his family for more than 20 years. The properties at 214-226 Park Street cover 2432 square metres on the corner of Palmer Street.

214–220 & 222–226 Park Street, South Melbourne.

Colliers agents Tim Storey, Jozef Dickinson, Philip Heberling and Aaron Choong have the listing and are expecting more than $30 million.

In bayside Brighton, the owners of a 2547-square metre development site at 11-13 Black Street are hoping for about $20 million. Close to the Church Street strip, the site has a permit for 23 “oversized” apartments designed by Bruce Henderson Architects. Gross Waddell ICR’s Danny Clark, Andrew Greenway and Glenn Ye are running the campaign.

Hawthorn prize

Four bidders competed for 556-558 Glenferrie Road in Hawthorn, with the $2.45 million sale price reflecting a tight 3.8 per cent yield.

The buyer was a local private investor adding to their portfolio. The two adjoining properties on the corner of Henrietta Street were offered for the first time in 50 years.

They are on 372 square metres in the block south of Glenferrie railway station between Burwood and Riversdale roads.

Fitzroys’ Ben Liu, Chris James and David Bourke managed the auction campaign.

Over the river, another private investor bought a strata-titled shop in the Toorak Village for about $1.1 million after it passed in at auction. Fitzroys’ Lewis Waddell and Chris Kombi sold 525 Toorak Road for a local family. The 74-square metre shop came with a three-year lease to wellness retailer Nutrition Shark.