Country's first Kmart centre to double in size

The owners of the Kmart Plaza, also known as the East Burwood Plaza, will double the size of the complex, on the corner of Burwood Highway and Blackburn Road, from 15,000 to 30,000 square metres.

Pomeroy Pacific development manager Paul Chiodo said the $35 million extension would add about 30 specialty shops, a 5500 sq m Coles supermarket, a 333-seat restaurant, a gym and a First Choice bottle shop. The extension will be built over a car park on the western side of the 6.3-hectare site.

German discount supermarket chain Aldi will lease the 2981 sq m supermarket space now occupied by Coles. Kmart, which occupies about 8444 sq m and trades around the clock, will not relocate.

Mr Chiodo said the extension and renovation would start early next year.

The Plaza is between Colonial First State's 57,138 sq m Forest Hill Chase Shopping Centre, and Centro's 62,830 sq m The Glen, in Glen Waverley.

After the extension, Kmart Plaza will be substantially bigger than the nearby Vermont South Shopping Centre, and the Burwood Heights Shopping Centre. Kmart Plaza is owned by a consortium of private investors, and Pomeroy, which paid $13.3 million for the centre in 1992.

Courted position

A 13-LEVEL office building in the heart of the city's legal precinct is believed to be close to selling to a private investor for just over $27 million.

Well-placed industry sources say Macquarie Direct Property Fund is offloading Maurice Blackburn House at 456 Lonsdale Street, after buying it for $23 million in 2002, and then undertaking a major renovation.

The 8226-square-metre office occupies an enviable position in the legal precinct, wedged between the County Court of Victoria, the Supreme Court and the Children's Court of Victoria. Its biggest tenants include law firm Maurice Blackburn Cashman, the Department of Human Services and the Dispute Settlement Centre of Victoria.

The speculated $27 million sale price reflects a 10 per cent drop on the property's book value at December 31 of $30 million. But it would give a new owner an 8.1 per cent yield, based on the building's annual income of about $2.2 million.

A Macquarie spokeswoman declined to comment, as did Knight Frank selling agents Langton McHarg and Paul Henley.

Cafe society

SOUTH Melbourne-based restaurateur Salvatore Malatesta has leased retail space at developer Michael Yates' Yarra Lane development in South Yarra.

Mr Malatesta will open Sensory Lab, a "coffee cellar door" type cafe, in a 44-square-metre ground-floor space of a larger building.

The owner of South Melbourne's famous St Ali cafe expects to open in South Yarra next month, joining gadget store Apple, which will open a 44 sq m shop at the same time.

Frock shop Le Louvre is also believed to be moving from its long-time home at 74 Collins Street, to a former electrical substation at 2 Daly Street, South Yarra.

Queensland Investment Corporation, owner of the former Nauru House office building, confirmed it had bought the city site from fashionista Georgina Weir. Agents speculate Ms Weir's property, which she inherited from her couturier mother Lillian Wightman in the early 1990s, would be worth between $10 million and $12 million.

QIC will incorporate the National Trust-listed facade into a $500 million redevelopment of offices, shops and a hotel.

Keeping occupied

REFURBISHMENT solutions company Isis has leased offices and naming rights of a prominent Queens Road building, opposite the busy Kings Way junction, and Albert Park Lake.

Isis will lease 2427 square metres at Macquarie Office Trust's 5 Queens Road, office space previously occupied by Symbion Health, which moved to 474 St Kilda Road in March. Isis will relocate from nearby Eastern Road.

Joining Isis is IT services company Unico, which will relocate from Bowen Crescent around the corner, and occupy 2386 sq m at 5 Queens Road. Unico will lease space formerly occupied by National Foods, which moved to Docklands in November.

Thorburn Commercial's Kenny Thorburn and Crabtree's Chris McKenzie negotiated the Unico deal. Savills is also a marketing agent for the building.

The 11-storey, 17,719 sq m Queens Road tower is now 96 per cent occupied. The 5 Queens Road building was until recently known as Pura House, and before that Jetset House.

Rents are marketed online at between $250 and $290 a square metre a year.

Centro cashes in

HEIDELBERG'S Warringal Shopping Centre, in Burgundy Road, has been sold to private investor Tagon Administrators for $30 million.

The 11,722-square-metre, single-storey complex is the latest to be offloaded by beleaguered shopping centre manager Centro, which paid $11.4 million for Warringal in 2001, according to the Property Council of Australia's Shopping Centre Directory.

Tagon, a consortium headed by Leonard Kipen, purchased Warringal at a discount to Centro's $32.9 million December 2008 book value.

A $30 million sale price reflects an 8.9 per cent yield, based on the centre's annual rental capacity of $2.66 million.

Centro made $39 million from the recent sale of its Centro Ringwood Shopping Centre, and $17.25 million from the sale of Centro Hamilton. It is expected to make another $12 million from the sale of its Centro Rosebud centre, and about $12.5 million from the sale of Centro Meadow Heights, about 17 kilometres north of the city.

Shifting zones

PERTH-BASED developer Aspen Group has quietly listed for sale a controversial 48-hectare Mornington Peninsula property it acquired as a "green wedge"-zoned site two years ago and had rezoned.

The Dromana property, at 143 Nepean Highway, is a resort development site and will be sold with a permit for an 80-room hotel, a function centre, winery, restaurant, golf driving range and 472-site caravan and camping ground.

Despite the rezoning, Aspen is not expected to recover all the $6 million it is believed to have paid for the site in 2007. CB Richard Ellis selling agent Scott Callow would not comment on the sale.