Capital Gain

Telstra disconnects suburban properties

With media and telecommunication services increasingly moving in a digital direction, ASX-listed Telstra is offloading a portfolio of redundant suburban sites, until recently used as telephone exchange points.

The nine super-prime assets, which form a fraction of Telstra's enviable property portfolio, are expected to sell for about $5 million and make way for residential projects in the medium to long term.

The most prominent site - measuring 574 square metres - is at the north-west corner of Cotham and Normanby roads in Kew. The most valuable site, 604 square metres at 61 Tennyson Street, in Elwood, is expected to fetch about $900,000 and make way for a 15-unit townhouse complex.

Other properties being offered at 535 Springvale Road, Glen Waverley, 129-133 Mackie Road, East Bentleigh, 313-315 Ascot Vale Road, Moonee Ponds and 70 Camberwell Road, Hawthorn East. Nearby, another block on the corner of Bright and George streets in Camberwell is also for sale.

Two Bulleen sites - at 8-12 Flinders and 2 Greenaway streets - are also being offered.

Most blocks are between 500 to 750 square metres.

Telstra is selling the sites, mostly recognised as single-level brick buildings and car parks, with concept plans, but not permits, for residential conversion.

GrayJohnson's Matt Hoath and Beller Commercial's Fred Nucara are representing Telstra.

Glass's sells CBD site

Glass's Information Services has reaped $4.1 million selling a CBD asset it has owner-occupied for 27 years.

The publisher of the car-value guide will lease new premises after selling 48-50 La Trobe Street only a couple of days after an expression of interest campaign closed. Glass's paid $690,000 for the free-standing historic building, which includes a 212 square metre open-air car park to the rear, divided by a laneway. The overall block size is about 541 square metres.

Savills directors Clinton Baxter and Nick Peden said the asset sold to a local private investor after numerous offers were received.

"Given the rapid rise in CBD land values, Glass's decided to unlock the capital in the property for deployment in its business," Savills said. "The trend of owner-occupiers taking advantage of escalating land values to sell and lease is becoming quite pronounced."

Earlier this year Cancer Council Victoria reaped $28 million selling two Carlton assets, ahead of a move to offices at 615 St Kilda Road, which it will rent.

The Glass's asset is walking distance to the Parliament train station and Carlton Gardens. It was listed for sale with price expectations of $3.6 million.

Waurn Ponds expands

Australian Unity has commenced a major extension of a Geelong shopping centre, two years after a $30 million capital raising to do just that.

The Waurn Ponds Shopping Centre, about 75 kilometres south-west of Melbourne, will increase from 21,000 square metres to 35,000 square metres after the works are completed next year.

Supermarket Coles and discount variety store K-Mart have committed to space in the complex which already includes a Woolworths, Priceline, Reading Cinema and Target. About 700 car parks will be added as part of the $65 million expansion, a joint venture between Australian Unity Investment's Retail Property Fund and Coles Group Property Development Limited.

Closer to town, AU's Diversified Property Fund is selling a Port Melbourne asset with six tenancies with the potential to earn about $2.75 million in annual rent. Knight Frank's Gab Pascuzzi and James Templeton are marketing the Business 3 zoned asset, expected to sell for about $26 million.

Fitzroy North shop

A retail shop, part of the historic National Bank of Australasia building on the corner of Queens Parade and Delbridge Street in Fitzroy North sold at auction for $940,000.

The 123 square metre shop returns annual rent of almost $49,000 and sold on a yield of 5.2 per cent - considered low for a non-prime retail strip. CVA Property Consultant's Bradley Ellul said the property sold for $90,000 above expectations.

Altona North rezoning

Developer Folkestone has applied to rezone a chunk of one of the western suburbs' most prominent industrial sites, so that it can replace the land with offices.

The Altona North block at 302-330 Millers Road was previously occupied by Cabots. A new road was recently developed through the site, connecting the street to Chambers Road.

Part of the former industrial land has also been rezoned to allow for the construction of a 25,000 square metre homemaker centre, currently being marketed by CBRE.

Brunswick project

A $60 million-plus mixed use project with some 100 flats is mooted for a Brunswick development site quietly sold this month for more than $4 million.

The former Aurora Floor Coverings site at 774-778 Sydney Road was finally offloaded three years after a building on the site suffered extensive fire damage. The site spreads across 1800 square metres.

Elsewhere in Brunswick, Little Property Developments, the construction company of former Toll Holdings chief Paul Little, is redeveloping the former Tip Top Bakery into a $100 million village dubbed by critics as Mini Miami. The 1.25 hectare former bakery will make way for six apartment towers, three of which will rise 10 levels.

Amazon on the move

The world's largest online retailer, Amazon, has chosen an exclusive Melbourne address as its Australian headquarters.

The US-based giant will quit temporary serviced offices for a plush 600 square metre suite on level 13 of 1 Collins Street.

It's understood Amazon issued a requirement for the space earlier this year and will relocate in July. The prime office at the south-west corner of Spring Street is near Parliament station and opposite the Treasury Museum and Treasury Gardens.

Knight Frank's Ben Ward and Hamish Sutherland are understood to have leased the space, but declined to comment when contacted by Capital Gain citing a confidentiality agreement. Jones Lang LaSalle was representing Amazon.


Twitter: @marcpallisco

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