Saracens Head Hotel back on the chopping block

The first CBD auction for the year has been locked in, with 387–391 Bourke Street going under the hammer on March 8.

Just up the road from the Bourke Street Mall, the building was a McEwans hardware store in the last century and the Saracens Head Hotel in the 19th century.

It was also one of the many properties listed for sale during 2023 which failed to sell. It’s early days for 2024, but agents are reporting greater levels of enquiry and confidence among buyers and vendors.

The former home of the McEwans CBD hardware shop is expected to sell for about $9 million.
The former home of the McEwans CBD hardware shop is expected to sell for about $9 million.

Cushman & Wakefield’s Daniel Wolman, Oliver Hay, Leon Ma and Anthony Kirwan are handling the auction.

The double-storey building sits close to NAB’s new office tower (also on an old McEwans’ site) and Cbus’ new $1 billion office tower on the corner of Queen St, where the Commonwealth Bank is a committed tenant.

It’s on a 345-square-metre site and is one of only two privately held freehold properties on the block.

The building last changed hands for $7.2 million and is expected to fetch around $9 million.

Meanwhile, the C&W Melbco team has made the first CBD transaction for the year selling 105 Elizabeth Street for $7.55 million in an off-market deal, reflecting a land price of $30,443 per square metre.

The buyer, an offshore investor based in China, was sourced by Ma, who heads up C&W’s Asia division.

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The five-level office and shop last changed hands in 2001 for $2.5 million.

Lease

Global real estate player Hines has scored its first tenant at T3 Collingwood, the group’s first mass timber office building in the Asia-Pacific region and the tallest in Melbourne.

Coffee chain Starbucks is moving out of Cremorne into a 1400-square-metre floor of the 15-storey tower. The eight-year lease starts in June.

The T3 Collingwood office tower is fast attracting tenants now that it is fully built.
The T3 Collingwood office tower is fast attracting tenants now that it is fully built.

Hines spec-built the project at 36 Wellington Street, banking on potential tenants needing to see – and smell – the finished wooden building before they committed.

Colliers agent Travis Myerscough, who negotiated the lease with colleague Damien Adkins, said discussions are under way with several tenants who are prepared to move out of Cremorne or smaller spaces in Collingwood.

The building is targeting a 5.5 Star- NABERS rating and a 6 Green Star rating. The timber design has led to a 37 per cent reduction in carbon.

Hines’ head of Australia and New Zealand David Warneford said: “The market for premium green buildings is robust in Australia”.

Rents in the building range from the mid-to-high $500 per square metre range to the low $600s for the upper floors.

Queens Road

Tim Chang and Michael Xie’s Everland Group is offloading the Queens Road investment it made during the market’s peak in 2018.

Records show Everland paid Larry Kestelman $59 million for the 19-storey tower overlooking Albert Park.

This year, expectations are pitched at more than $50 million. The tower is on a large 2300 square metre site and 50 per cent leased to Kestelman’s LK Property Group.

But not for long. Kestelman is moving his empire to a new development at 66-68 Green Street, Cremorne, where views to the CBD are over the railway tracks.

Everland has already taken a haircut on one of its investments, selling 596 St Kilda Road to Sydney’s Ripple Parekh for around $25 million in 2020.

Cushman & Wakefield agents Oliver Hay, Daniel Wolman and Leon Ma are handling the transaction.

Reece

ASX-listed bathroom behemoth Reece has emerged as the buyer of a St Kilda property once occupied by rival Tradelink.

The 1300-square-metre site at 344-360 St Kilda Road is on the corner of Pakington Street and close to Reece’s Inkerman Street showroom.

Records show Reece settled on the property late last year, paying $7.15 million, slightly less than the $7.9 million price paid in 2021 by a developer. Reece is understood to be planning a new flagship showroom and office headquarters on the site.

Fitzroys agent Mark Talbot, who handled both transactions with Tom Fisher, said the off-market sales process involved developers, but they could not make the numbers stack up.

“Rising construction costs and increasing holding costs such as financing and land tax are making conditions challenging for developers,” Talbot said.

Bayside

The Marine Hotel in Brighton turned off its taps last year after 167 years of serving ales and sherbets to the local community. It was once a favoured watering hole of 19th-century poet Adam Lindsay Gordon.

The vendor paid $15.8 million in 2018 and expects to reap more than $18 million.

Marine Hotel at 199–217 New Street, Brighton.
Marine Hotel at 199–217 New Street, Brighton.

The pub is on a large 4670-square-metre parcel of land at 199-215 New Street and a short walk from the beach.

It’s up the road from Xavier College’s 32,000-square-metre campus, Kostka Hall, which was bought by developer Golden Age 18 months ago for $100 million.

An application to build 84 double-storey townhouses on the Kostka site was recently rejected by Bayside Council despite getting the go-ahead from its planning department.

Gorman Allard Shelton agents Jonathon McCormack and Stephen Gorman and Vinci Carbone agents Joseph Carbone and Frank Vinci are handling expressions of interest.

Medical

Coming under the hammer this week is the St Kilda Day Hospital and Medical Centre in the “Poet’s Corner” of Elwood.

The clinic at 26A–26B is one of 16 properties on offer at Burgess Rawson’s first Investment Portfolio auction for 2024. Local GP Vasily Lebedev is the vendor.

There are two buildings on the 822-square-metre site covering 418 square metres. Not-for-profit group MSI leases the hospital, while the medical centre, which has occupied the site for nearly 40 years, has a lease until 2038.

It rakes in $441,089 a year in rent and is expected to sell “in the low $6 millions”.

Burgess Rawson’s Beau Coulter, Shaun Venables and Zomart He are handling enquiries, along with JLL’s Nick Peden and Mark Stafford.

Health-related properties, perceived as having less exposure to the vagaries of other inflation-affected tenants, are doing well during the downturn.

Just before Christmas, a local investor paid $45 million for Australian Unit’s Manningham Medical Centre at 200 High Street, Lower Templestowe. Last month, South Australian investor Viv Padman paid $20 million for another medical centre in Corrimal, New South Wales. CBRE agents Sandro Peluso, Marcello Caspani-Muto and Jimmy Tat did those deals.

They are also selling the Mercy Place aged care facility in Boronia, which is expected to fetch around $7 million. The vacant 40-bed home is on a 1.04-hectare site.

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Source: Thanks smh.com