VicRoads surplus land sale to boost state coffers by $50m

Capital Gain

The state government is looking at a much needed $50 million-plus windfall for its depleted coffers from the upcoming sale of a 9.6 hectare development site abutting the EastLink tollroad.

The large piece of land at 706 and 760 Boronia Road, in Wantirna, wraps around the Hungarian Community Centre and the former Scope disability services facility at No. 750.

Records show the property was acquired by VicRoads in 1989 when planning started for a new road.

The property is on four titles in the Wantirna Health Precinct West Comprehensive Development Plan, which means it can be used for a significant range of mixed-use projects.

The area’s status as a health hub is underpinned by the Knox Private Hospital and Eastern Health up the road, but the planning rules also allow for residential, retirement and education purposes.

Colliers agents Jozef Dickinson and Philip Heberling have been appointed by the Department of Transport and Planning.

Several development sites in the area, which was once home to apple orchards, have traded in the past several years.

In 2021, Stockland paid $61 million for the 8.3 hectare Wantirna Caravan Park at 203 Mountain Highway where it is developing more than 300 townhouses. The vendor, Longriver, had paid $35.6 million for the property in 2016.

It was the peak of the development cycle. A consortium called Asian Aussie Group paid $14.1 million for the 2.9 hectare Scope site, which remains derelict, that same year.

Supermarket sales

ASX-listed property giant Charter Hall has sold the Lansell Square shopping centre in Bendigo for $110 million as a dearth of new supermarket developments is luring more investors into retail.

A Chinese investor is understood to have purchased the 23,498 sq m sub-regional shopping on a yield in the mid-6 per cent range in an off-market deal brokered by Stonebridge’s Justin Dowers and Kevin Tong.

Lansell Square is anchored by Coles and Woolworths supermarkets and a Kmart. It last changed hands for $32.5 million in 2012 and got a $38 million revamp in 2015.

“For the first time in years, in the retail sector, fundamentals are driving growth,” Dowers said.

“For the last four to five years, there’s not been enough development, so centres are now performing better and that’s driving more investors towards them.”

The Stonebridge team is also marketing the Coles and Aldi shopping centre in Kilmore which is expected to fetch around $40 million.

That 5264 sq m retail centre is on a large 18,600 sq m site. Coles has a 10-year lease while Aldi is looking out to 20 years. Other tenants include McDonald’s, Viva Energy and Amplifon.

The shift in fundamentals is prompting retailers to start buying up supermarkets that they lease which need to be redeveloped.

Late last year, Woolworths bought the 3213 square metre centre it leases on Doncaster Road, East Doncaster for $16.35 million, in a deal done by Colliers’ Tim McIntosh, Will Heffernan and Yvonne Zhou.

At the cheaper end of the market, the IGA Plus supermarket in Upwey, in the Dandenong Ranges, is going to auction as part of the CBRE portfolio auction next month.

The 1320 sq m building at 62-64 Main Street, includes the supermarket and a second level of separately leased tenants.

It’s on an 883 sq m site opposite the train station in the quaint village and returns $241,945 a year.

CBRE agents David Napoleone and Sam Mercuri are handling enquiries. Greville Pabst is acting as transaction manager. It’s expected to fetch around $3.4 million.

The next big one to watch is the trophy supermarket in Brighton, owned by the recently merged super fund ISPT and IFM Investors, at 382-386 Bay Street.

The 4360 sq m supermarket is expected to sell for more than $50 million. Dowers and Tong are marketing the supermarket with Cushman & Wakefield’s Oliver Hay, Trent Weir, Daniel Wolman and Leon Ma. Expressions of interest closed mid-week.

Two shops

It’s rare for a property that passes in at auction to sell much later for a better price but two shops at 1203-1205 High Street, on the trendy Armadale strip, have inched over the line.

The shops, home to Small Wins Cafe and Endota Spa, passed in last December at $4.9 million and sold late in February for $5.3 million.

“After the property passed in at auction late last year, we worked closely with the vendor to recalibrate the campaign. The private process created competitive tension between two international buyers, which ultimately drove the sale,” said Gross Waddell ICR’s Alex Ham, who did the deal with Michael Gross.

Records show the vendor was Sharon Bassat, owner of the previous tenant, the high-profile Willow Urban Retreat and wife of Seek co-founder Paul Bassat.

Bassat’s investment vehicle paid $2.8 million for the two-level 431 sq m shops in 2015. They are on a 322 sq m plot of land.

Auction action

There are plenty of forthcoming fresh auctions to test the market.

And maybe it helps to have some grunge glamour on your side. At the gritty city end of Smith Street, once dubbed the world’s coolest strip, the Lckr Room bar freehold is going under the hammer on March 27.

The double-storey 664 sq m building at 95-97 Smith Street comes with a valuable party-hard seven-day 3am liquor licence for 495 patrons.

It’s on a 434 sq m site near the Gertrude Street intersection. Melbourne Hospitality Co has a lease on the property to 2033 and pays $305,928 a year in rent.

Fitzroys’ agents Mark Talbot and Shane Mills have the listing and are expecting a price in the low $5 millions. It last changed hands in 2019 for $4.57 million on a tight 3.4 per cent yield.

The Mountford Shoes store at 751-753 Burke Road, Camberwell, is going to auction the day before.

The shop last sold in 2021 for $7.55 million on a sharp 4.1 per cent, but current retail yields are sitting at about 5 per cent which suggests the old price might not be achieved.

Mountford Shoes has traded out of the two-storey 420 sq m shop for more than 50 years. It’s on a plum 465 sq m site in Camberwell Junction, close to three supermarkets, major retailers and the market.

Mountford Shoes has a fresh lease on the building and pays $315,000 a year in rent. Fitzroys agents David Bourke, Chris James and Ben Liu have the listing.

The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.