- Prime 15-level office tower at 628 Bourke Street in Melbourne's CBD on the market
- The Aspendale Childcare Centre nearing completion.
- Abacus Bar & Kitchen is rapidly expanding to St Kilda road
Melbourne’s commercial property market has been busy in the first few months of 2023, with a number of new developments getting started as well as iconic buildings changing hands. There continues to be significant demand for quality commercial real estate in the city and the market has so far been holding up well to start the new year.
Here are five notable transactions, listings and new developments to start the year.
Bourke Street Office Tower
A prime 15-level office tower at 628 Bourke Street in Melbourne’s CBD was recently put on the market by Swiss owner AFIAA and is listed with Knight Frank.
The refurbished A-Grade building offers 24,127sq m of net lettable area and has a 5.0 Star NABERS Energy rating and 5.5 Star NABERS Water rating. The building is 90% leased to majority government and listed corporations, with a WALE of 2.0 years.
The tower was originally constructed in 1989 and was recently extensively refurbished with almost $35m invested including a new ground floor lobby and retail activation, state-of-the-art end-of-trip facilities, a full lift upgrade and an expansive recreational deck including an outdoor terrace and tennis court.
Knight Frank agent, Trent Preece said opportunities to acquire a core-located Melbourne CBD office tower of this quality and scale are incredibly rare.
“The asset will be highly sought after by domestic and offshore buyers given the prime location on the prestigious Bourke Street only 150 metres from Southern Cross Train Station. Investors will be attracted by the significant recent investment in the building, positioning the asset to capitalise on flight-to-quality trends and significant rental reversions upon lease expiries.”
The Aspendale Childcare Centre
Located at 14 Station Street, Aspendale, the 142-place childcare facility is due for completion in September 2023. The development was spurred on by a significant childcare shortage in the area, with a child-to-place ratio of 10.3 zero- to five-year-olds to each Licensed Daily Place in the suburb, compared to the Victorian average of 2.7. The property has a lease to nationally renowned childcare group Eden Academy, which has plans to build 11 new facilities, adding to its existing portfolio of 19 centres.
Tim Grant, Director, CBD & Metropolitan Sales at Savills, said “The centre will greatly benefit from its proximity to numerous established education facilities, with around 2,800 enrolments across six schools within a kilometre.”
The Abacus Bar & Kitchen
Abacus Bar & Kitchen is rapidly expanding, with a second location set to open on 549 St Kilda Road following the success of its Chapel Street venue. The new café experience will be situated on the busiest strip of Melbourne’s public transport network, in the heart of St Kilda Road’s health precinct. The 265 sqm turn-key opportunity boasts a high-end kitchen fit-out and expansive outdoor setting. Abacus Bar & Kitchen will also open venues at Melbourne’s Emporium and Chadstone later this year.
Colliers‘ Manager of Retail Leasing, Tom Larwill said, “Having a notable hospitality vendor like, Abacus committing to the St Kilda Road location is a positive sign not only for retailers along St Kilda Road, but it also shows that the precinct is back in business with employees returning to the surrounding offices.”
The Coventry Street Freehold Investment
The ultimate Melbourne city fringe freehold investment, located in a prime position between Clarendon Street and South Melbourne Market, will be going to auction this month. Fitzroys’ Tom Fisher and Mark Talbot are marketing 257 Coventry Street, South Melbourne, which comprises a dual-tenanted, fully-leased 250sqm building with separate access to each tenancy and side access ROW from Union Street, on a 166sqm site. The property is being offered with two recently renewed leases to two established tenants returning a total rental of $140,120pa plus outgoings and GST.
Fitzroys’ Tom Fisher said, “South Melbourne’s really thriving at the moment. This property’s strategically positioned on Coventry Street, superbly located between Clarendon and Cecil Streets, and enjoys all the convenience of Clarendon Street shopping, the iconic South Melbourne Market, numerous commercial offices and a host of other lifestyle attractions all within walking distance.”
The Auburn Road Commercial Asset
For the first time in over 30 years, 157 Auburn Road in Hawthorn changed hands, with Colliers securing the sale of the trophy-style commercial asset for $5.1 million to a local owner-occupier.
The 1,183 sqm two-storey building sits on a 668 sqm Commercial 1 Zoned land, and a separate 369 sqm General Residential Zone 3 site, and is expected to undergo refurbishments for predominantly office use. The city fringe and inner suburban markets are currently dealing with over 170 businesses looking to buy their own office with a total office area demand of approximately 90,000 sqm from this buyer profile.
Colliers’ Director of Investment Services, Ben Baines said, “Prime assets with value-add potential have become increasingly popular, providing owners occupiers the chance to utilise immediately while also providing opportunities for the future.”
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