Balaclava's Beller House set to sell for "well above $20 million"
A major commercial building in Melbourne’s inner suburb of Balaclava has hit the market and is expected to sell for more than $20 million.
Beller House, at 281A-289 Carlisle Street, also known as Carlisle Corner, is part of the main retail strip in the inner-south suburb, which is in the heart of Melbourne’s Jewish community.
The 3132-square-metre building, with 44 car parking spaces, is spread across 2720 square metres on a site zoned Commercial 1, which allows businesses including accommodation, child care centres and offices to operate on the site.
Underdeveloped assets in suburban strips are considered by agents to be hot properties. Photo: Supplied
While CBRE selling agent Mark Wizel would not put a price on the asset, industry sources expect it to attract interest “well above $20 million”.
The two and three-storey property last sold for $18.5 million in October 2015, which represented a land value of $6800 a square metre – one of the top prices paid for the area at the time.
“It’s very difficult to put a price on an asset which has so much to offer in terms of its existing leasing profile, its exceptional location, its place, and perhaps emotional attachment, within a well-resourced, tight-knit community,” Mr Wizel said.
There was “massive potential” to build a mixed-use development on the site, with the area having undergone major gentrification and apartment development in the past few years, he said.
Built in 1973, the corner block has 18 tenancies, including a gym, medical centres and a restaurant, which contribute to an annual rental income of about $1.09 million.
Suburban strip retail properties in Melbourne are in demand from local, interstate and offshore developers, especially assets with strong land value, national retailer tenants and proximity to public transport, Mr Wizel said.
“The sale of Heidelberg’s Burgundy Plaza in November last year is an example of developers’ willingness to accept tight yields (of sub 3 per cent) in order to capitalise on an attractive eight-plus level height precedent,” he said, adding that the purchase represented a land rate of $6710 a square metre.
“This was one of eight sales north of $10 million across Melbourne’s suburban strip retail market last year which is quite astonishing.”
He also cited the sale of a Coles supermarket in Clayton, which fetched $17,115,000 on a record yield for supermarkets of 2.57 per cent in late March.
That property had a price guide in the sub-$10 million range, meaning it sold for some $7 million above expectations.
Further from the CBD, a car parking lot in Box Hill with nothing on it sold to a Chinese developer for $8.25 million in mid-March – further indication that sites in gentrifying suburbs with development potential are hot on buyers’ lists.
Mr Wizel is selling the Balaclava property with Nathan Mufale and Rory James, as well as co-agent Gross Waddell’s Michael Gross and Benjamin Klein.
Expressions of interest close in May.
