- Dexus has announced the launch of DREP2.
- Two Melbourne trophy assets hit the market.
- Bendigo hotel development site listed.
Today’s wrap features a spade of activity across Victoria from Melbourne to Bendigo and Maryborough, including retail, industrial and more.
New Dexus fund launched
Following the success of Dexus’ first dedicated opportunity fund, Dexus Real Estate Partnership 1 (DREP1), Dexus has announced the launch of DREP2.
DREP2 is the second in a series of closed-ended opportunity funds that seek to provide wholesale investors with an enhanced return through exposure to investments in property repositioning, development, special situations and credit opportunities.
“In a competitive landscape, we have leveraged the Dexus platform to identify and successfully deliver nine transactions across the spectrum of real estate investments for DREP1,” said DREP fund manager, Jason Howes.
DREP1 continues to assess a strong pipeline of opportunities and also announces today residential acquisitions in Melbourne including:
- 41 recently completed apartments in stage 1 of a development in the Melbourne CBD, and
- 79 apartments in a recently completed unit development in Central Melbourne, subject to FIRB approval.
“We continue to see attractive entry points in the residential market, which presents further opportunity for the fund in a capital constrained investment environment,” said Howes.
DREP1 has adopted a disciplined and rigorous deal assessment process, with only 4% of potential opportunities moving to execution. The fund has deployed capital across credit (38%), repositioning (27%), development (23%) and special situations (12%).
DREP1 closed in December 2022, with the fund’s investment capacity at circa $1 billion, including gearing. DREP1 is on track to deliver the target net equity IRR of circa 15%.
“Responding to market conditions and continued demand for opportunity-style investments, we expect DREP2 will attract substantial investor interest from domestic and international investors, particularly from high-net-worth investors and family offices looking for enhanced returns from Australian real estate investments,” said Howes.
DREP2 is expected to be substantially larger than DREP1, with the first capital close expected in H1 CY2024.
Bendigo hotel development site listed
A ready to build development site with DA approval for a hotel within Bendigo’s Hargreaves Mall precinct has been listed for sale by Bendigo Hotel Investments.
Located at 306 Hargreaves Street, the site has been approved for a 110-room four-star hotel with hospitality, retail and meeting facilities at ground level fronting Hargreaves Mall.
CBRE’s Scott Callow is managing the sale via an expression of interest campaign closing 23 November.
Two Melbourne trophy assets come to market
Mitchell House and Milledge House, two freehold properties on one of Melbourne CBD’s most prominent corners, are being offered to the market.
The adjoining properties represent one of the largest privately held retail corners in Melbourne CBD’s ‘Golden retail core’, located between Melbourne Central Shopping Centre and the Emporium.
Oliver Hay, Daniel Wolman, and Leon Ma of Cushman & Wakefield have been exclusively appointed by a private vendor to sell the properties via an international expressions of interest campaign, with Tom Byrnes of Charter Keck Cramer acting as transaction adviser.
“It’s been more than five decades since this privately-held retail trophy asset has been brought to market in what is one of Melbourne CBD’s busiest retail and residential corridors,” said Hay.
The two assets sit on a land parcel of over 1,800 sqm on the corner of Elizabeth and Lonsdale Streets, with 85 metres of retail frontage. Both assets are fully leased with a strong and diversified income stream with multiple prime retail tenancies including Aussie Disposals, KT Mart, and China Bar, some of which have been trading in the premises for over 30 years.
Melbourne industrial lots hit the market
The last seven lots of industrial zoned land in The Dilop at Epping Estate, 21 kilometres north of the Melbourne CBD, have been offered to market on behalf of industry-leading developer, Citinova, with Savills Australia and New Zealand appointed exclusive agents for the sale.
The lots, known as lot 22 & lot 33 to 38 at Dilop Drive, Epping range in size from 1,512 to 2,616 sqm, are zoned industrial 1 and come serviced with NBN, water and power on site.
The estate has easy access to major arterials such as the Hume Freeway, Edgars Road, Metropolitan Ring Road and Western Ring Road and is home to a large number of amenities such as The Northern Hospital, Pacific Epping Shopping Centre, Costco and Mantra Hotel.
Maryborough Woolworths for sale
Savills Australia and New Zealand have been exclusively appointed to sell a high performing freestanding Woolworths supermarket in Maryborough, 140 kilometres north-west of Melbourne’s CBD, which is being offered for the first time ever.
The property, located at 34-36 Tuaggra Street and 103 Napier Street in Maryborough is being offered for sale with a net lease in place. In addition, the investment offers security of tenure via a 24-year lease expiring October 2034 plus options.
The net lease structure also offers rental increases of 10% at the first option period and 5% for options thereafter.
Sitting on a commercial 1 zoned site of 9,699 sqm, the supermarket and BWS store comprises a large full-line store of 4,294 sqm and is currently returning a net income of $944,215 per annum. Woolworths Group have almost completed a significant $9 million refurbishment of the store which is set to include a dedicated Direct to Boot offering in addition to internal and external upgrades. Works are due to be completed in November 2023.
The EoI closes 16 November.