Capital Gain

Conservative corner about to go all rad

At one of the Melbourne CBD's busiest corners, it will soon be out with the old and in with the new - target customers, that is.

In a major city retail lease deal, Brisbane-based youth department store Culture Kings will take all 1338 square metres of the three-level stand-alone building at 1-5 Queen Street, for 58 years home to Fletcher Jones, which went into administration in 2011 after nearly a century.

On the north-west corner of Flinders Street, opposite the station, the 746-square-metre site sold to Malaysian investors with vacant possession two years ago.

It was speculated the new owner would develop a high-rise building, capitalising on postcard views over Flinders Street Station to the Yarra River, Southgate and Port Phillip Bay. That seems unlikely now, Culture Kings committing to an initial five-year term with a five-year option.

Kliger Wood Real Estate's Rogan Sedger, Russell Meerkin and Grant McKenzie were the marketing agents. Starting rent is about $200,000 a year, or $149 per square metre, substantially lower than prices asked for prime retail precincts such as Bourke, Elizabeth and Swanston streets.

Mr Sedger said Culture Kings' presence would add vitality to the western end of the CBD.

While Fletcher Jones sold apparel for conservative older generations, Culture Kings is aimed at the teen and 20s markets, selling clothes, accessories and music.

The business is only now expanding with shopfronts, concurrently operating a more established, successful online business. It has used the move to retail real estate to establish an instore hairdressing chain.

Culture Kings has outlets in Brisbane and the Gold Coast. Selling local and international brands, the business' first Sydney store opened last year, at 420 George Street.

Asian currency

Asian builders have invested three-quarters of a billion dollars in Melbourne inner-city development sites in the past 24 months.

In the latest off-market deal, a first-time, Shanghai-based developer paid $22.2 million for a 2003-square-metre site at 95-111 Franklin Street, capable of accommodating more than one skyscraper.

CBRE director Mark Wizel, who sold the site with Josh Rutman, said the new owner would soon propose a strategy for the property, which at present includes a low-rise building leased to a car rental company. Banco was the vendor.

Mr Wizel said in two years $761 million of Asian money has been invested in Melbourne sites, with another $115 million in sales currently under negotiation.

Affordable industrial

Melbourne developer MAB Corporation has made more than $5 million selling 17 blocks within its Orbis industrial estate in Ravenhall, about 22 kilometres west of Melbourne.

In a suburb considered to have the most affordable industrial land values (and rents) in the country, the average 1700-square-metre blocks sold for about $240,000 each. Smaller 1000 sq m blocks sold for an average of about $190,000, according to selling agents CBRE and Knight Frank.

Knight Frank's Joel Davy said sites with frontage to Robinsons Road were priced higher than "rear lots". Robinsons Road is a major exit from the Western Highway.

Early this month MAB listed for sale a 3795 sq m slice of its NewQuay precinct, in Pearl River Road, Docklands, with a permit for two apartment towers and 425 flats. Mr Wizel is expecting that site to sell for about $25 million.

Selling the farm

The LaManna family is set to reap about $13 million from the sale of a long-held farm in the eastern suburb of Donvale, about 24 kilometres from town.

The former nursery with frontage to Mulsanne Way, Ruby Street and busy Mitcham Road has been subdivided into 20 lots, ranging in size from 502 to 4347 square metres. These supersized blocks are each expected to sell for more than $1 million.

The family rebranded the nursery Ruby Place before listing the blocks for sale as a housing estate. Oliver Hume director Paul Ciprian will conduct the auction on site at 1pm on Saturday. Given the lack of new housing supply in the eastern suburbs, he expects more than 500 people.

Recently the LaManna family opened a fresh-food market at Essendon Fields, the redevelopment of the former Essendon Airport, about nine kilometres north-west of town.

12 at one blow

Nine commercial real estate agents and other related service groups will team up to sell a portfolio of 12 commercial properties in Melbourne and Geelong on Friday. The Network Investment Auction, as it is billed, aims to sell $15 million of real estate at a function to be held at Leonda by the Yarra in Hawthorn.

Properties are priced from less than half a million to about $7 million for an industrial asset in Laverton, one of several properties in the west. Sites are also being offered in Kew, Greensborough, Port Melbourne, South Yarra, South Melbourne and the CBD.

Group auctions can save vendors money by sharing the costs associated with an auction. Unusually for this event, there are several non-agency sponsors including Macquarie Bank, law firm Maddocks, KNP Solutions, M3 Property, the Tomorrow Agency and The Age.

It's a plot (of land)

In a major win for anti-development crusaders in Northcote - who communicate on an entertaining Facebook page - an owner-occupier has outbid six residential developers to buy one of the suburb's busiest corners.

The long vacant site at 137-151 St Georges Road, on the south-west corner of Arthurton Road, and also with access to Auburn Avenue, opposite Batman Park, has sold for $4.2 million.

The site was the subject of a controversial planning dispute, with a five-level tower mooted to rise above ground-floor shops and basement car parking. A permit was not offered for the site, marketed by Hocking Stuart Commercial's Kenny Oliver and George Georgiou.

Several former commercial and community sites in Northcote have recently been redeveloped as apartments. A 10-level building, Acacia, is the tallest, rising beside the Northcote Plaza Shopping Centre and All Nations Park.

'Squizzy' interest

An as-yet-undisclosed organisation has paid $3.6 million for the former Carlton police station site, the latest in a swath of properties the state government has sold in the past 12 months.

The 992-square-metre block at 334-344 Drummond Street sold after a public tender campaign closed in late May. The station shut in 2010 after 130 years. It includes a heritage-protected historic building from about 1887.

Gangsters "Squizzy" Taylor and Alphonse Gangitano were processed at the property between Elgin and Faraday streets, opposite the rear entrance of the Lygon Court shopping centre.

Jellis Craig's Simon Shrimpton and Craig Shearn represented the state government, which last July sold another historic former police station at 155 Royal Parade, Parkville, to residential developers for $5.5 million.

The City of Melbourne rejected an opportunity to buy both stations to use as community space. The government has moved functions from both sites to a large, new inner-city station at 36 Wreckyn Street, North Melbourne.

Around the inner city the government also recently offloaded a former Richmond TAFE site for $9.25 million.

The most valuable property it has offered, a 125-hectare parcel at Point Cook West, sold to Perth-based developer Satterley Group for more than $100 million in May.

Twitter: @marcpallisco

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