Fashion maven fills The Age’s former Collins St home with tenants

The Age and the Australian Financial Review, now owned by Nine, vacated the purpose-built 16,600-square-metre seven-level property in 2019 when they moved to Nine’s office at 717 Bourke Street.

Fairfax Media, the newspaper company bought by Nine, had struck a 20-year lease in 2009 when the building was completed.

The deal reflected a passing yield of 7.5 per cent – well up on the tight 4.75 per cent recorded during the years of low-interest and low vacancy rates.

Radio station 3AW remains on the top floor with other tenants including Service Stream and the University of Tasmania. The building will remain known as Media House.

The leasing campaign was undertaken by Cushman & Wakefield’s Vincent Tran, Stephanie Harding and Ben Ward who declined to comment.

The building was originally developed and built by Grocon. The front, home to an electronic billboard, is currently swathed in scaffolding while aluminium cladding is replaced with non-combustible panels. Luckily, none of the not-so-secret smokers among the papers’ staff set the building on fire back in the day.

Hospitality hotspot

The slump in CBD property values is yielding a new buyer breed: hospitality operators taking a punt on buying their premises instead of leasing – and it’s not just at the high-end where Chris Lucas, Justin Hemmes and the O’Brien Group have paid top dollar for well-placed venues.

This week, an owner-operator bought 171 Bourke Street for $3.88 million and has plans to open a new Asian fusion restaurant in mid-2026.

The building is near the corner of the Bourke and Russell streets intersection which looks poised for a comeback with a new pub and hotel bar pulling in the punters. A swag of luxury hotels and fine dining nearby is also helping drive the renaissance.

The deal was negotiated by Colliers’ Matt Stagg and Yvonne Zhou.

Down the other end of town, a Sydney investor has paid $3 million for the Grain Store cafe at Shop 2 of 517 Flinders Lane.

The deal reflected a building rate of $15,000-a-square-metre and a yield of 5.7 per cent.

Grain Store, which opened in 2013, committed to a further 10-year lease in April 2023. Jones Real Estate’s Luke Peric did the deal.

The west end precinct also has its share of new attractions, notably Sand Hill Road’s new seven-level Waterside Hotel.

Natural therapy

The buyers of Fitzroy’s Southern School for Natural Therapies emerged this week after applying for development permits.

A joint venture between B&B Property Group’s Stephen and Ben Buxton, and PACASA’s Stefano Paciocco has acquired 25-37 Victoria Street for a price believed to be about $20 million.

The sale was negotiated by Colliers agents Matt Stagg, Ryan Milivojac, Ben Baines and Yvonne Zhou. Peter Smyth from Untitled Property represented the Jacka Foundation who bought the property for $1.53 million in 1996.

The joint venture has a caveat over the buildings – part of which is the 1889 Acme Shirt Factory – and applied for an eight-storey 60-unit project through the State Government’s Development Facilitation Program.

Paciocco is a former development manager at Stephen Buxton’s first property business Hamton Property Group – Hamton’s first project is nearby, on the corner of Fitzroy Street.

The plans drawn up by DKO Architecture include restoring the original shirt factory frontage and building behind and above it.

The Buxton family, multi-generational property players, also have a foothold on the old swimsuit shop at 430-444 Brunswick Street and 224-228 Smith Street through Valli, which is backed by MAB founder Andrew Buxton.

All roads

Fresh from the landmark completion of its Bourke Street Mall Mecca project, fund manager Newmark Capital is going back to basics.

It’s purchased the VicRoads Testing & Inspection Centre in Ballarat for $8.975 million on a 7 per cent yield for the Newmark Property Income Fund.

While that yield might seem on the high side, the lease has just four years left to run with two-year options.

The building at 86-88 Learmonth Road, Wendouree, purpose built for VicRoads in 2001, is zoned for public use, which limits it to government-related activities. It’s on 8485 square metres of land and returns $628,000 a year.

CBRE’s Scott Hawthorne and George Wilkinson handled the transaction which drew six offers from local and interstate investors. Records show the vendor was the local Edward family.

Deals done

The year is ending with a bang at the retail end of the market with a swag of competitive deals struck on sharp yields.

The sale of a tiny vacant shop at 416 Toorak Road set the sharpest yield of the lot – just 2.5 per cent from a $2.7 million deal.

The 150-square-metre shop is on 196 square metres of land opposite the Trak Centre and Vicland’s St Germain project, and is a few doors away from Orchard Piper’s recently completed project.

In East Burwood, 19 bidders registered for the auction of the KFC building at 123-125 Burwood Highway last week, with the buyer paying $5.83 million, reflecting a 3.3 per cent yield on a gross lease.

The deal was one of six properties worth a total of $50 million sold by Stonebridge Property Group in the past 10 days. The Red Rooster Wodonga drew seven bidders and sold for $3.35 million on a 5 per cent yield.

Stonebridge’s Kevin Tong, who did the deals with Rorey James, said the depth in the buyer pool – all 26 registered parties for both auctions demonstrated an intention to buy – indicated a strong sign of market confidence.

The team also sold the Pakenham BP and KFC servo for $14 million on a 5.61 per cent yield.

A Sydney buyer has paid $6.41 million for China state-owned Sinopec’s first Australian servo on a 5.81 per cent yield.

Cushman & Wakefield’s George Davies, who handled the negotiations with Oliver Hay, Raphael Favas and Leon Ma, said five offers were made for the property.

The servo at 325A Nepean Highway, Frankston was developed and sold by Jasbe.

In Ringwood, a strata property at 5-6/74-82 Maroondah Highway occupied by a Club Lime gym, sold under the hammer for $5.9 million.

Four bidders competed for the 1288-square-metre open-plan showroom with a local investor out muscling competition from around Melbourne and Australia.

Fitzroys’ Ben Liu and Chris James and Gross Waddell ICR’s Glenn Ye and Danny Clark ran the auction.

Club Lime, owned by ASX-listed Viva Leisure – Australia’s second-largest fitness network – has a new 10-year lease. The price reflected a tight 5.7 per cent yield.

Season Greetings

That’s a wrap for 2025. Capital Gain wishes all readers a happy holiday season and a prosperous new year.