Bunnings ditches Costco for Coles

Wesfarmers subsidiary Bunnings is playing property developer again - turning its back on US retail giant Costco in favour of its supermarket stable mate, Coles.

Wesfarmers subsidiary Bunnings is playing property developer again - turning its back on US retail giant Costco in favour of its supermarket stable mate, Coles.

After recently relocating to a retail warehouse twice the size of its last one in Mentone, the hardware group is proposing to develop a major shopping centre on its outgoing site at the super-prominent corner of Nepean Highway and Oak Avenue, about 21 kilometres south-east of town.

The complex, with an expected end value of more than $60 million, is said to include a full-scale Coles supermarket, First Choice Liquor, showrooms, specialty stores and a car park which will be used by shoppers at Bunnings' new outlet nearby.

For months it had been speculated Costco would open its third Victorian store at Bunnings' outgoing Mentone site. Bunnings said it was working on a "terrific future" for the site but declined to comment in more detail.

Matt Nichols, whose agency Nichols Crowder focuses on the south-east, recently signed leases for seven prominent Nepean Highway showrooms between the old and new Bunnings sites. Mentone Toyota is the highest profile tenant, set to open a new dealership across three shopfronts. Ray's Outdoors, Subaru and Supercheap Auto have renewed.

He said the redevelopment of the Nylex site nearby is adding to consumer confidence in the area.

Early last year Bunnings was granted approval to build a 350-unit apartment complex on Doncaster land it acquired, initially, to build a warehouse. A Bunnings store will now form the lower levels of the proposed Doncaster project.

Ex-Tinkler office sold

A Docklands office until recently occupied by a company controlled by miner Nathan Tinkler, who made a rare public appearance at a liquidator's hearing this week, has sold for $2.5 million.

The 488 square metre suite, part of the Aquavista Tower at 401 Docklands Drive, includes an entertainer's balcony with a further 130 square metres and eight car spaces.

Tinkler's Patinack Farm Thoroughbred business operated from the office, which boasts postcard views towards Williamstown, Port Melbourne and Port Phillip Bay. The company owed creditors $5.5 million when it was liquidated in November.

CCA Financial Planners will now owner-occupy Tinkler's old suite, relocating from Williamstown Road, Yarraville, in Melbourne's inner west.

Knight Frank's Tim Grant marketed the strata office, part of MAB Corporation's NewQuay precinct of Docklands.

Bike ride for charity

More than $900,000 has been raised from the Victorian leg of the Chain Reaction Bike Challenge, considered the biggest fund-raising event for the state's commercial (and increasingly, residential) real estate sector.

This year more than 45 riders, allocated into seven teams, covered the 1000 kilometre track - spread across seven state peaks: Dinner Plain, Donna Buang, Falls Creek, Lake Mountain, Mount Buffalo, Mount Buller and Mount Hotham.

The two best fund-raising teams - ISPT and KordaMentha - have each earned a little over $155,000 for charities Starlight Foundation and the Royal Children's Hospital.

The event, started in Melbourne seven years ago, brings together rival administrators, developers and agents and now runs in New South Wales and Queensland.

City corner sells

A six-level building at a busy city corner sold this week for $15.5 million, two business days after an expression of interest campaign closed.

At the north-west corner of Flinders Lane, 43-53 Elizabeth Street is close to the Flinders Street Station and Bourke Street Mall. On a 357-square-metre block the 1730 sq m building includes ground floor retail and boutique offices above. Based on the current rental return of $644,205, the asset, part of which is vacant, sold on a yield of 4.2 per cent.

Knight Frank director Paul Henley said there was strong interest from local and offshore investors and developers. Mr Henley and colleague Marcus Quinn represented the vendor, Vantage Property Investments, with Savills Clinton Baxter and Nick Peden.

Vantage, which paid $4.2 million for the building in 2001, said investors have enjoyed 33 per cent per annum capital growth. The sale price values the CBD land at $43,417 per square metre.

Bowled over by $5.75m

Bowls Victoria has reaped $5.75 million from the sale of a Hawthorn office it has occupied since 1985.

Bowlers House at 11-23 Burwood Road, which rises four levels and includes 2128 square metres of lettable area and 53 car parks, was purchased this month by another owner-occupier, the National Institute of Integrative Medicine.

On a 1500 square metre block, but unattractive to large-scale developers because of a height restriction covering the area, the sale price translates to a rate of about $2700 a square metre of lettable office area.

Colliers International's Hamish Burgess and Peter Bremner represented Bowls Victoria, which listed the office for sale in mid-2012.

The precinct around the Hawthorn train station has become a medical hub since 2010 when the former Vecchi office at 50 Burwood Road, nearby, was redeveloped as a hospital and medical centre.

Another owner-occupier, developer Little Property Group - controlled by former Toll Holdings executive Paul Little - paid $6.85 million in early 2011 for 41 Burwood Road, an office for years occupied by builder Abigroup.

Carlton Gardens view

Having leased all 8500 square metres of a St Kilda Road office four months ago, Cancer Council Victoria is expecting $25 million from the sale of two large Carlton premises it has occupied for years.

The most valuable site at 1 Rathdowne Street, on the north-west corner of Victoria Street, is expected to sell for about $16 million to a developer. The 3100-square-metre block with three street frontages could make way for several major towers, which would enjoy view security over Carlton Gardens to the east.

Another property at 100 Drummond Street has also been listed for sale with price expectations of about $9 million. Identified at street level as a row of double-storey terraces, the 3354 square metre office extends to six levels at the rear and also includes four apartments. The site occupies a 1189 square metre block and is walking distance to the CBD.

Savills Clinton Baxter and Nick Peden are selling the Carlton assets.

Cancer Council Victoria will move to 615 St Kilda Road, a building for years occupied by the Tatts Group which recently quit Victoria for Queensland.

Southbank tower

Plans for another Southbank skyscraper are being reviewed by Planning Minister Matthew Guy.

Earmarked for 57 Haig Street, between the West Gate Freeway and Clarendon Street - the proposed 38-level tower will include a four-level basement car park with 143 spaces. A nine-level podium rising from ground level will include a retail component.

Last month Mr Guy approved a controversial 72-level apartment tower for a nearby site 54-56 Clarke Street, a decision the Melbourne City Council is now seeking to revoke via the Victorian Civil and Administrative Tribunal.

Mr Guy is also considering an application to develop a 108-level apartment tower at 70 Southbank Boulevard.


Twitter: @marcpallisco

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