Capital Gain

Busy Salvo reaps nice return in CBD

By · 9 Nov 2013
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clock 9 Nov 2013
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Busy Salvo reaps nice return in CBD

Local developer Mario Salvo has quietly turned around a healthy profit onselling for $20 million a CBD office his investment arm Salvest Capital Australian Real Estate Fund bought in the 2009 downturn for $15 million.

Another local investor, David Lambert, has purchased the 41-year-old office at 128 Exhibition Street, between Bourke and Collins streets, opposite the former Southern Cross hotel site.

The 11-level building on a 540-square-metre block was previously owned by GIO Australia, which was was taken over by AMP in 1998.

In 2000 the office transferred to the AMP Henderson Global Investors Ltd for $5 million. AMP sold the building to Salvest more than a year after it was first listed for sale.

Mr Salvo said the investment was intended to be onsold when market conditions improved. His building arm is developing two 50-plus-level apartment towers on the site of the former Crazy John's headquarters in City Road, Southbank. He is also building flats on the former Going Going Gone site in Victoria Street, Abbotsford, which he bought for $22 million in 2008. In the CBD, Mr Lambert also owns a 19-level, 15,653-square-metre office on a 1434-square-metre block at 461 Bourke Street, near the corner of Queen Street.

Both Bourke Street and Exhibition Street buildings could be demolished and replaced with denser, taller towers in future, given recent development trends.

Welcome Weylandts

South African retailer Weylandts will open the first of about six Australian stores in Abbotsford after reportedly spending about $2 million on a luxury refit of a Gipps Street factory it has agreed to lease for 10 years.

Weylandts will open on the former Match Factory site at 200 Gipps Street on Wednesday. The 4628-square-metre lease is struck at a starting annual rent of $500,000. The retailer, which sells high-end homewares, has reconfigured the double storey red-brick building into a showroom with restaurant, bar and cafe.

The property is near a bend in the Yarra River, which has seen a wave of commercial and residential redevelopment in recent years. It's only a few metres from the Gipps Street steps that lead to the river, popular with cyclists and walkers.

Vinci Carbone manages the building and negotiated the lease for a private investor.

Weylandts manager Jo Newman said the company is in Australia for the long haul. After opening a Sydney store in a few months, it plans to open at least another four stores nationally.

Balencea sale

Gold Coast builder Sunland and local developer Pellicano are offloading the ground floor retail space of the exclusive Balencea building they developed at 454 St Kilda Road.

The 175-square-metre space, leased to Hunter's Kitchen and Bar, is attached to a 149-square-metre terrace, which is licensed. Hunter's pays annual rent of $131,721 and is committed for five more years. Balencea is a unique apartment building with low density - it rises 23 levels but includes just 84 apartments. Fitzroys agent Michael Ryan is expecting about $1.9 million from the retail space.

After the sale Sunland and Pellicano will have sold out of the complex.

Ryan O'Grady, a sales and leasing executive with Pellicano, said the developer was focusing on commercial and residential projects in Melbourne's south-east suburbs.

Another chief moves

Rival agency directors are surprised CBRE decision-makers this week snubbed a Victorian employee for its highest profile local position.

Matt Haddon, CBRE's outgoing senior managing director, Victoria said his role will be filled by Cameron Grier who works at one of the agency's suburban Sydney offices. Mr Haddon said "state boundaries play a less significant role now that the property industry has a much more national focus".

One rival managing director quipped that CBRE's dominance in the Victorian market this year has been "mainly led by one shooting star rather than great leadership from the top".

"Maybe the chiefs at CBRE want someone in place that can create a more solid business where they have a number of star players who share the load across the field."

In the past 12 months three Victorian senior managing directors - from Knight Frank, Jones Lang LaSalle and now CBRE - have been replaced.

Baby's growing

Family-owned national retailer Baby Bunting will shut its 20-year-old outlet in Burke Road, Balwyn and reopen in a facility three times as big in nearby Hawthorn.

Baby Bunting, which was established in Melbourne 30 years ago, has taken a 1525-square-metre lease at the ground level of developer Caydon's Atria building at 291 Burwood Road.

The prominent retail space, opposite a multistorey and busy Bunnings store, is next-door to Bed Bath and Table's The Works store, which sells designer linen and homewares.

Baby Bunting CFO Stuart Will said the Burwood Road location was a motivating factor in moving the store from Balwyn. The retail deal is the latest in a string for Caydon, which has populated ground-floor tenancies of other apartment complexes with, among other stores, IGA, Huxtaburger and Viva Brazil. Caydon general manager Andrew Jones negotiated the Baby Bunting deal.

Hero shops sold

Developer and restaurant owner Peter Bartholomew can expect about $5 million from the sale of three shops at the ground level of the Hero apartment building at the corner of Russell and Little Collins streets in the CBD.

The small shops generate a total rent of more than $300,000. One is leased to Japanese restaurant Izakaya Den. CBRE's Josh Rutman, Ed Wright and Mark Wizel are representing Mr Bartholomew, who also financially backed Frank Camorra's MoVida restaurant in Hosier Lane.

Landmark decision

Pictured left is the first published image of a landmark 75-level skyscraper Planning Minister Matthew Guy has been asked to approve at the top of town.

Chinese developer Golden Age is seeking to replace the Drummond Golf building at 452-472 Elizabeth Street, at the north-east corner of Franklin Street, with the complex, which will include 622 flats but just 163 car park bays.

The tower is earmarked to rise from just a 932-square-metre block. In June, developer Equiset Grollo also pushed planning boundaries asking the minister to approve a thin 54-level commercial and residential building on a 483-square-metre block at 464 Collins Street.

Last month Mr Guy approved a 61-level apartment project at 260 City Road, Southbank, which is said will accommodate 600 residents.

Twitter: @marcpallisco
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