Pedigree London & Lancashire building hits the market

After an hour-long auction last week, an investor paid a stunning $12,025,000 for the London & American Stores shop near the Queen Vic Market.

Five bidders fought for the triple-storey shop at 483-485 Elizabeth Street, making 158 bids in front of a large 200-person crowd.

The store sold for 40 per cent over reserve on a yield of 1.63 per cent. The vendor, who had owned both the shop and business for 30 years, bought it in the depths of the early 1990s recession for just $702,500.

The Art Deco building is on a 263 sq m site with 711 sq m of space.

Colliers agents Anthony Kirwan, with Hay, Wolman and Ma ran the auction.

Most of the hour-long battle was between two local groups and the “hot contest” between local and offshore bidders “exceeded even our expectations,” Kirwan said.

“Despite rising interest rates we are handling countless active buyers and under-bidders in these campaigns eager to secure commercial assets in the CBD grid,” he said.

Market splash

Around the corner, an offshore buyer entered the Melbourne CBD market with a splash buying an office building at 365 Lonsdale Street for $10 million.

The buyer had to elbow aside 11 underbidders to snare the near-vacant three-storey office near Melbourne Central and Emporium.

The same Colliers agents above negotiated the deal over a 4.5 week campaign which drew 102 enquiries and 28 inspections.

The 770 sq m building is on a 415 sq m plot of land and has only one tenant, a ground floor Korean supermarket.

Hay said the offers came from a wide range of buyers – owner-occupiers, local investors, offshore investors and value-add developers.

“The property was purchased by a first time entrant to the Australian property market, a private family from Vietnam who had been waiting to travel to Melbourne for two years to secure a freestanding CBD building,” Kirwan said.

Records show Richard Mizgala’s Power Investment Corp had paid $2.36 million for the glass fronted office in 1986.

Betty’s Burgers

Still in the CBD, the Hansen family’s Kymarnam is selling one of its ground level shops at 97 Elizabeth Street, under the Ibis Budget hotel.

The 458 sq m two-level shop near the corner of Collins Street is leased to Betty’s Burgers. It also has access from Equitable Place at the rear.

Fitzroys agents Chris James, Shawn Luo and David Bourke are handling the expressions of interest campaign and expect the shop to fetch more than $8 million.

Betty’s Burgers, owned by Retail Zoo group, has a lease until December 2026 with a 10-year option. It pays $438,035 a year in rent.

Betty’s Burgers got its start in Noosa. The Elizabeth Street store opened in 2016 and was the chain’s first foray into the Melbourne market.

While the Hansen family own all four shops on the ground floor, the three-star Ibis hotel upstairs was bought last year for $23.75 million by Sydney developer Eduard Litver.

The Hansens, who made a motza out of the listed Hansen Technologies, have been selling down their large property portfolio over the past couple of years.

Tech sector

In the hot Cremorne tech precinct, Victorian Racing Club vice chairman Michael Ramsden is selling his private office.

Ramsden, who is also managing director of Terrain Capital, bought the office eight years ago for $2.5 million.

The four-level 556 sq m office is on a 258 sq m Commercial 1 zoned site. It has basement parking for eight cars and sweeping views from a rooftop terrace.

Jones Real Estate’s Sam Guest and Paul Jones are handling the August 12 auction and expecting around $5 million.

The boutique office is in the heart of the tech sector and will be sold with vacant possession.

Jones said it could lease at around $550 a sq m.

Car yard

Another great expanse of suburban land devoted to selling cars is set for the chop.

The Chadstone Toyota dealership is on 5577 sq m at 1547 Dandenong Road, Oakleigh, close to the retail shrine that is Chadstone Shopping Centre.

Records show the property, leased by Patterson Cheney, is owned by investor Graeme Ward’s Ward Property Services.

CBRE’s Nathan Mufale, Scott Hawthorne, David Minty and JJ Heng are handling the expressions of interest process.

The move follows a series of big prices for car yards.

Across the road, the 6953 sq m Chadstone Ford and Hyundai yard sold for $32.6 million on a 3.3 per cent yield to developer Fuxin and in May, Mercedes Benz Toorak sold for $67 million to developer Piper Orchard.

In January, build to rent developer Make Ventures paid $40 million for Preston Toyota.

“The zoning provides for several higher order uses. We’re fielding strong early interest from private and institutional residential developers and build-to-rent operators,” Minty said.