Stockland to cut Altona North warehouses loose

The Sydney-based fund manager and developer expects to make about $50 million for the Altona North warehouses, leased to Toll Holdings for a weighted average of 51/2 years.

A sale price would result in an 8% yield, based on the portfolio's annual income of $4.1million.

Stockland paid $58 million on a low 7% yield for the three high-tech office-warehouses in August 2006 in what was considered a landmark sale that "re-rated" Melbourne's already healthy industrial investment market.

The portfolio was sold by Portland House Group, an investment company led by wealthy businessman David Hain.

Two of the buildings are used as distribution centres for Nike and Arnott's, while a third is for Toll's IPEC division.

The buildings are part of a nine-warehouse business park built for and fully leased to Toll businesses.

Stockland says it will move capital from the Altona North portfolio into higher-growth investments.

This includes reinvesting in its existing development pipeline or buying new assets.

In August, Stockland announced a 58.9% slide in full-year net profit to $705.2 million for the last financial year. During that period, Stockland sold $787 million of commercial property, to achieve a low debt gearing of 28.9%.

The company also issued a profit downgrade for its British operations yesterday.

CB Richard Ellis senior director Graham Hemingway is marketing the Altona North portfolio.

Should be so lucky

THE Minogue family will be watching with interest what becomes of a double-storey B-grade Hawthorn office building for sale across the road from an A-grade office they bought last year.

Teska Carson's Andrew Morley is marketing the unrenovated office with vacant possession at 117 Church Street, and expects the buyer to refurbish the property, on a 436-square-metre block of land.

The office was once occupied by television personality Daryl Somers and is walking distance to the GTV 9 studios in Bendigo Street, Richmond.

The building is opposite Church Hill, a new 2700 sq m office building the Minogues bought "off the plan" for about $12.5 million.

Colliers International office leasing agent Travis Myerscough confirmed VicRoads has leased about 850 sq m at the ground level of Church Hill, joining multinational giant Procter & Gamble, which leased about 750 sq m in February.

Rents are believed to be almost $300 a square metre, excluding rental incentives.

Less than 500 sq m of the Minogues' building is vacant.

Toll plans facelift

A DEVELOPMENT company affiliated with Toll Holdings managing director Paul Little says it is deciding a new future for a prominent but unattractive 11-level South Yarra office building it bought for $33 million in September last year.

Little Project Development director Kevin Britton says it has met with Stonnington City Council and architects, and will soon lodge plans for the Toorak Road property, which will include reworking its brown brick facade.

The site is near the intersection of Chapel Street and is surrounded by development sites - predominantly disused factories - undergoing or set to undergo redevelopment, mostly into apartments.

LPD's building has a large tract of land at the rear that could accommodate a second building. It could also be extended out and up, subject to council approval.

Mr Britton says ideas for the property include a boutique hotel, offices and residential apartments. It's expected ground levels of the building will be retail.

A 38-level apartment building is proposed for the Fun Factory site next door.

The LPD building was put to the market by ANZ, which built the tower in the early 1970s as a data centre.

At the time the building was sold, the bank also sold a central business district office building at 287-301 Collins Street to the Australian Property Growth Fund for $30.5million.

LPG recently resurrected plans for a $50 million, 52-unit apartment project on the former Anglican church site in Wattle Road, Hawthorn.

It is also developing a new Bunnings outlet in Burwood Road, Hawthorn, and has developed the former Cussons warehouse in Stawell Street, Richmond, into 133 apartments.

Preston on the up

MELBOURNE'S newest and biggest multi-purpose accommodation facility was launched in Preston this month.

The second stage of the former Preston And Northcote Community Hospital redevelopment in Bell Street is complete and includes a high-rise, 383-room hotel and apartment building, 21 conference rooms, two restaurants, a bar and parking for 500 cars.

These projects add to the first stage of the project, which included 444 apartments leased to operators of serviced apartments and student accommodation. The project has an end value of $240 million.

A daily shuttle bus operates from Bell City, the name for the new development, to nearby La Trobe University and the CBD.

Asian Pacific Building Corporation, headed by father and son team David and Will Deague, bought the three-hectare site in 1999 for an undisclosed sum. The hospital closed in 1996.

A piece of the Pies

MELBOURNE'S pub market will be tested again, with prominent Albert Park hang-out The Beach Hotel up for sale, with a price of about $12million. The Collingwood Football Club has a lease on the pub until 2021, with options to extend to 2036.

It pays a little more than $830,000 a year to lease the 1662 sq m building, which includes a bar, restaurant, function room, courtyard and 11 accommodation rooms. It also has 38 poker machines.

Kelemen Commercial director Andrew Egan is marketing The Beach Hotel, one of the biggest pubs to be offered for sale since South Yarra's Arcadia, at the corner of Toorak and Punt roads in South Yarra in July. The Arcadia was asking about $7 million.

Last year, the Gunn Island Hotel in Middle Park sold for $8.55 million, Richmond's Prince Alfred sold for $8.1 million and the Palace Hotel in South Melbourne fetched $3.7million in some of the most hotly contested auctions of the year.

It is believed interests associated with the Carlton Football Club unsuccessfully tried to buy two private gaming portfolios offered last year - Castello and Zagame.

The Beach Hotel has a total site area of 1283 sq m.