Neighbourly headache close to home for Hird
The application, affecting a block in Trawalla Avenue that was until recently a mansion and tennis court owned by businessman Rodney Smorgon - requests a three-storey complex with 16 car parks.
Prominently featured in news reports throughout the 2013 season, Hird's 80-year old Toorak property - also with a tennis court and on a 1436-square-metre block - is valued at $9 million. Hird paid $2.4 million in 1998 - renting it out until the mid-2000s.
The 110-square-metre house was developed by merchant Edward Hayne and later owned by horse breeder Norman Carlyon and brick-maker owner John Shergold - who sold it to Hird.
One lucrative Bombers backer undeterred by recent events is Mario Salvo - whose proposed Platinum apartment complex in Southbank is a major sponsor of the Essendon Women's Network Finals Lunch next month.
"It's a tough time for all Essendon supporters and we wanted to show our support and commitment to the club moving forward," Mr Salvo said.
McGoldrick offloading
Healthcare professional Ian McGoldrick has sold another Kew asset.
This time, at 85-87 High Street, near the Kew Junction, a 2285-square-metre, three-level office with a 62-bay car park has been sold for about $9 million.
Currently returning $705,000, the asset was sold on a yield of 7.8 per cent, considered low given a looming large vacancy. Jones Lang LaSalle director Joshua Tebb and Peter Sprekos were the marketing agents.
"Such strong demand, in particular from investors, was surprising given the upcoming vacancy of the GTA tenancy, an occupier of approximately 70 per cent of the building. Typically, purchasers would apply a discount due to the vacancy and the reletting risk," Mr Sprekos said.
Mr Tebb said Boroondara's office vacancy rate is 7.85 per cent compared with the south-east suburb average of 9.4 per cent.
Earlier this year another of Mr McGoldrick's Kew office assets at 17-27 Cotham Road was sold for $10.2 million. He also offloaded a 6.1-hectare Ringwood development site, capable of yielding 180 dwellings, for $4 million.
Going up in Preston
Darebin City Council has identified 35 hectares of under-utilised commercial land in Preston East to rezone for intense residential development - which may include the suburb's tallest buildings.
The zone, bound by Chifley Drive, Albert, Bell and Gower streets, is south of the Northland Shopping Centre, a public transport hub that successive state governments regard as a major activity centre.
Identified in a 2012 council study as under-occupied, the Preston East tract includes 19 blocks owned by 10 interests.
It accommodates 53 businesses employing 673 people.
Council plans to fit 13,000 occupants within the space - 7000 as workers and the balance as high-rise dwellers. Building height limits have not been imposed.
Nine kilometres north of the CBD, the area's highest profile and newest business is Masters hardware. One of the occupants, Cigweld employs just 41 staff, down from 1000 more than 10 years ago.
A green donation
R.E. Ross Trust - through subsidiary Hillview Quarries - has donated 47 hectares - the equivalent of 25 MCGs - to the Cardinia Shire Council for use as a recreation reserve.
The Officer and Pakenham land, protected by a Trust for Nature conservation covenant, was purchased in the 1980s for a quarry expansion that never happened.
Between Bathe and Carpenter roads, about 50 kilometres south-east of the CBD, and known as Hillview Bushland Reserve, the parcel is bisected by Officer-Upper Beaconsfield Road.
An adjacent seven hectares has been subdivided as nine residential lots and will be sold, all proceeds being donated to charity.
Mayor Brett Owen said the "generous" donation of about $15 million was an example of how business, local government and philanthropy could work together for the lasting benefit of the community.
Five reasons to invest
A 15-year-old Richmond office known as Building Five within an exclusive business park at 658 Church Street has been sold for $10.8 million.
Syndicator and investment manager Vantage Property Investments purchased the four-level, 2200-square-metre office on behalf of a North American investor.
On the north-west corner of Walnut and Dale streets, the office is one of five developed on a former SEC power station near the Yarra River and Monash Arterial. It returns high $800,000s rent.
Vantage director Hamish DeCrespigny, who acted with colleague Matt Spring, said it will now manage a program to enhance capital value and rental return for the new owner.
Low-rise offices in the Richmond business park have been mooted as ripe for residential redevelopment in the longer term. Jones Lang LaSalle's Joshua Tebb represented the Richmond vendor.
Once hallowed ground
The Anglican Church is offloading another property, this time in day spa county Hepburn Springs.
The site, which includes an Anglican church and the adjacent Borsa Hall, will be offered with vacant possession and is expected to sell for about $285,000. On the corner of Ninth and Church avenues, the 880-square-metre block with buildings developed circa 1917, is expected to attract interest from an investor who may redevelop, or lease the building to a spa-themed operator.
Close to Hepburn Spring's main street, and three kilometres from the more popular resort of Daylesford, about 115 kilometres north-west of Melbourne, the site also lends itself to a hotel conversion. Demolishing it to build something new is also an option.
Pat Rice & Hawkins' Bart O'Sullivan is the marketing agent.
On the waterfront
The waterfront Harba Oyster Bar and Grill in Mornington sold for $3.2 million to an investor who requested a 30-day settlement, saying the rental return was substantially better than bank deposit rates.
Lemon Baxter agent Jonathan Walls said shorter settlement periods have become a negotiating tool for investors, a swath of whom have entered the market as Australia's interest rate continues to circle record lows.
Harba pays annual rent of $219,000 to occupy 786 The Esplanade. On that basis, the new owner is earning a return of 6.7 per cent.
Term deposits of $4 million or more, for five years, are offering between 3.4 and 5 per cent, according to conjunctional selling agent Richard Curtain.
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Frequently Asked Questions about this Article…
A developer has lodged plans to build a three‑storey block of flats with 16 car parks on Trawalla Avenue, on a site that was formerly a mansion and tennis court. The proposal directly abuts James Hird’s Toorak home, which is on a 1,436 sqm block and valued at about $9 million. The article notes the proposal may affect Hird’s expected peace and quiet, so nearby development is a factor local property owners and investors often monitor.
The three‑level office (2,285 sqm with a 62‑bay car park) sold for about $9 million and was returning $705,000 per year, equating to a 7.8% yield. Agents commented the strong investor demand was surprising given an imminent large vacancy (one tenant, GTA, occupied ~70% of the building), which would normally prompt purchasers to apply a discount for reletting risk.
The article cites Boroondara’s office vacancy rate at 7.85% versus a south‑east suburb average of 9.4%. Vacancy rates matter because higher vacancies typically increase reletting risk and can force buyers to apply discounts to purchase prices, affecting rental income stability and capital value for investors.
Darebin City Council has identified 35 hectares of under‑utilised commercial land in Preston East for rezoning to intense residential development. The precinct includes 19 blocks owned by 10 interests, 53 businesses employing 673 people, and the council plans to accommodate 13,000 occupants (about 7,000 workers and the balance as residents). The area sits near Northland shopping centre and public transport, and the study flagged potential for much taller buildings, which could create development and redevelopment opportunities for investors.
Notable sales include Building Five in Richmond — a four‑level, 2,200 sqm office bought by Vantage Property Investments for $10.8 million (returning high $800,000s in rent) — and the Harba Oyster Bar & Grill in Mornington, sold for $3.2 million with annual rent of $219,000, yielding about 6.7%.
In the Harba sale the buyer requested a 30‑day settlement, saying the rental return was substantially better than bank deposit rates. Agents noted that shorter settlement periods have become a negotiating tool as Australia’s interest rates hover near record lows, making fast completion attractive to buyers seeking income returns.
The article notes term deposits of $4 million or more for five years were offering between about 3.4% and 5%. By comparison, the Harba hospitality asset returned about 6.7% and the Kew office showed a 7.8% yield (though that Kew yield carried vacancy and reletting risk). This illustrates why some investors consider property yields versus bank deposit rates when choosing investments.
R.E. Ross Trust (via subsidiary Hillview Quarries) donated 47 hectares known as Hillview Bushland Reserve to Cardinia Shire Council for use as a recreation reserve, protected by a Trust for Nature conservation covenant. An adjacent seven hectares have been subdivided into nine residential lots to be sold, with all proceeds donated to charity; the donation was valued at roughly $15 million by the mayor.
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