Iglu starts work on new Russell Street tower

The purpose of the demolition and works is a 28-storey 374-bed tower designed by Bates Smart.

Capital Gain reported in November that Iglu director Jonathan Gliksten had put a caveat on No.274, occupied by Q Hair, which sold for $3.72 million.

As it turns out Iglu had already put a caveat on the five-storey Rido House next door at No.276-284.

Iglu already has two Melbourne accommodation facilities – one in Franklin Street and another in South Yarra.

In 2011, the owners of Rido House received a permit to develop a 35-storey 154-unit tower, dubbed Crystal Gardens on the tiny 381 square metre block but they never went ahead. The shop next door adds just 84 square metres to the site.

Rido House was built in1968 and acquired from the Rido Group by W&B Investment Group in 2008, for $7.35 million.

Last calls

Last Wednesday marked the last day for auctions until the corona virus crisis passes.

Crabtrees Real Estate Chris McKenzie and Luke Pitcher sold a factory-warehouse at 21C Edinburgh Street in South Oakleigh for $1.985 million.

Mr McKensie said there were two strong bidders amid the crowd of about 30 people for one of the last live auctions for some time.

“We weren’t sure what to expect. We ran it under pretty stringent conditions,” Mr McKenzie said.

The 1412 square metre building is on a 1513 square metre parcel of land with two street frontages and drive through access. It’s leased on a short-term basis to investor/developer Peter Fountas from Virtus Property Group.

The property had been held in the one family for more than 50 years and had been originally scheduled for auction late last year, he said.

Meanwhile, Crabtrees’ auction for a Dulux outlet at 1/9-13 Springvale Road, Springvale had been converted to an expressions of interest campaign.

“That property has also been held in the family for a long time and they had made the decision to separate their interests.”

“They’re pressing on with the campaign. There are buyers out there who aren’t going to sit on their hands when good assets come up,” he said.

An auction on Burke Road Camberwell didn’t fare so well. There were no bidders for the deceased estate at 652 Burke Road which passed in at $3 million.

But Savills agent Nick Peden said several offers had come in after the auction above that price.

Gorman Commercial agent Jonathan McCormack said upcoming auctions – the 7-Eleven at 65 Clow Street, Dandenong and 88 Maling Road, Canterbury – had been converted into expressions of interest campaigns.

“Unlike residential, commercial is au fait with expressions of interest campaigns. We do a lot of them and our buyers are used to them,” Mr McCormack said.

He sold a double-storey shop last week at 1 Claremont Street, Malvern at $1.9 million – $200,000 over the reserve – but only after the official auction had finished.

All agents are nonetheless expecting a slowdown over the next few months.

“June-July has always been a bit quiet while people went off to Europe. Well, that won’t happen this year,” he said.

Fuel stop

Petrol stations, with their long leases and stable incomes are attracting a fresh wave of cashed-up investors looking for a safe harbour.

Jones Real Estate agent Paul Jones sold a new off-the-plan service station in Dandenong South last week off-market for $8 million on a yield of 5.35 per cent.

The strata-titled servo at 247-263 Greens Road is near the first off-ramp from Eastlink into Dandenong and is leased to United Petroleum for 15 years at $450,000 a year.

Quinn Reynolds agent Marcus Quinn sold the Gisborne Puma within three hours of the campaign closing to a local private investor.

The servo sold at a circa 5.5 per cent yield which puts the undisclosed price around $6.5 million.

“The view is petrol stations are safe. There’s always going to be underlying demand for them. Stable income is highly sought after at the moment,” Mr Quinn said.

“But it’s all about the different sectors,” he said.

Mr Jones is also selling a service station at 55-57 High Street Heathcote. Expressions of interest close on April 22 and it’s expected to fetch more than $3.29 million.

“Heathcote is rural but it’s in the centre of a small strip. Everything else has started to shut but people can go there to get milk and other stuff,” Mr Jones said.

It’s on a 1993 square metre parcel of land and returns $190,962 a square metre.

“I thought there would be a bit of a pause – there’s been a pause in leasing. But there are calls coming in from Singapore and Dubai for this petrol station,” he said.

There is also interest from investors in the private sub-$10 million sector who have cashed out of the share market quickly and are looking at commercial property which has stable tenants and long term leases, he said.

Sought after

Cremorne, the scene of a tech-related building boom, is still attracting suitors.

Teska Carson agents Michael Taylor and Matthew Feld sold 132-134 Dover Street for $5.35 million or $10,500 a square metre.

Mr Taylor said three parties lodged bids for the 473 square metre warehouse.

“It was purchased by an owner-occupier with long-term view of development,” Mr Taylor said.

The 471 square metre property is on a 501 square metre site with Commercial 2 zoning.

It is understood an owner-occupier also snapped up 32 Wangaratta Street on Wednesday night which sold for an undisclosed price by expressions of interest rather than auction.

The 1140 square metre double-storey warehouse is on a 629 square metre block and had been owned and occupied by a textile manufacturer for decades.

It has mixed-use zoning and sits on the other side of Richmond railway station behind the Corner Hotel.

Mr Feld said developers are “a bit sheepish at the moment – not just because of the uncertainty but because there’s a lot going on in the area.”