Premier’s department returns to home base, but there won’t be a desk for everyone

The word on the street is that there won’t be a seat and desk for everyone in new old digs but then again, not everyone is expected to show up every day.

The move comes as the office-leasing market is reportedly fielding three briefs for new space from the state government which effectively shrinks 100,000 square metres into 80,000 sq m and just 60 desks per 100 workers.

The main building set for the heave-ho is 50 Franklin Street, where the Department of Justice and Community Safety leases the entire 19-level building. The former Qantas office was purchased by Macao-based investor Weng Lin Chan in 2018 for $90.15 million.

Other buildings possibly losing their public servants include 8 Nicholson Street and 121 Exhibition Street where the government houses Creative Victoria (already slated for job losses), and the departments of Jobs, Skills, Industries and Regions, Transport and Small Business.

The Department of Treasury and Finance, responsible for managing property moves, did not respond to Capital Gain’s inquiries. Nor did any of the agents leasing space in the tower.

CBD

Niagara House, at 370 Little Bourke Street, sold to a neighbour last week for $9.95 million, after passing in at auction just shy of the purchase price.

Six bidders competed amid a big crowd for the five-level property which is anchored by Macpac on the ground floor.

The deal reflected a yield of 3.9 per cent. Records show the vendor paid $1.725 million in 1998.

The 1330 sq m building is on a 329 sq m site, giving the result a land value of around $30,243 a sq m.

Fitzroys’ Lewis Waddell, Mark Talbot and Ben Liu handled the auction but declined to confirm the buyer.

Not making such a big capital gain is the vendor of the Peter Jackson store on Bourke Street which also found a local investor at $5 million.

The four-storey building at 418-420 Bourke Street is in the block west of the Mall and opposite Cbus Property’s new $1 billion tower at 435 Bourke Street.

The property was originally scheduled for a late June auction but Teska Carson agents Stephen Speck and Matthew Feld converted it to an expressions-of-interest campaign.

The vendor had paid $5.84 million back in 2019 on a super skinny 2.81 per cent yield. The best offer came with a sweetener – a 30-day settlement.

Also looking at a loss – a big loss – is the vendor of Momo House, at 189-191 Bourke Street, who paid $13 million in 2018. The current price guide is more than $6 million.

Two of the building’s three floors are leased, returning $282,155 a year in rent.

Cushman & Wakefield’s Oliver Hay, Anthony Kirwan, Daniel Wolman and Leon Ma are taking the property to auction on October 22.

Fresh to the market is the old Exploration Hotel in the Little Lon precinct. Behind the pub facade at 116-118 Little Lonsdale Street is a four-storey, mixed-use building, including basement and rooftop terrace overlooking leafy courtyards.

Records show it last changed hands in 1997 for $552,500 and was renovated in 2011 to a design by architect John Demos.

CBRE’s Alex Brierly, Nathan Mufale and Jing Jun Heng are marketing the property with Kay & Burton. They’re quoting between $6.5 million and $6.95 million.

Ryman

New Zealand retirement village developer and operator Ryman Healthcare has made a move on its Melbourne landbank, putting a site in Coburg on the market.

The former military textiles factory at 14-22 Gaffney Street cost Ryman $48.2 million in 2022. Current land values in the inner northern suburb suggest $40 million-plus is not out of the question.

Ryman was planning a retirement village for the 2.56-hectare site which included apartments, aged care and a dementia-care wing.

Cushman & Wakefield agents Hamish Burgess,Joe Kairouz, Oliver Hay and Leon Ma have the listing, dubbing the site “Coburg Lakes”.

Coburg Lake is nearby but you have to get over busy Sydney Road first. They declined to provide any price guidance.

The New Zealand company is planning to raise $500 million in cash in the next three to five years by “selected landbank divestment” and the sell-down of existing stock. No decision has yet been made on the Ringwood site where Ryman demolished the old Daisy’s hotel and embarked on groundworks before stopping the project in late 2023.

Three piece

A 95-place Box Hill childcare centre in the recently completed Trio Tower has been leased to Hong Kong-based childcare chain, Cosmic Education Group.

CBRE’s Sandro Peluso, Jimmy Tat and Marcello Caspani-Muto negotiated the lease with the international operator which has already opened its first Australian childcare centre in Mount Waverley.

The 20-year leasing deal was struck at a starting rent of $438,000 a year, which equates to a metric of $4600 per place.

It’s the second-biggest leasing deal in Box Hill since the team leased the 107-place childcare centre at Golden Age’s SKY SQR last year. That deal was struck at $545,700 a year or $5100 per place.

The triple-tower project at 845-851 Whitehorse Road was undertaken by the CBD Development Group with funding from MaxCap.

While some of CBD’s projects went bust during the pandemic, many of the 517 Trio Tower apartments were pre-sold and CBD obtained funding for construction.

The Trio Hotel, a vacant 128-room hotel is now for sale. Savills’ Mark Durran, Nick Lower and Benson Zhou are marketing the property which still requires fit-out. It’s expected to sell for about $30 million.

Kingsway action

A crowd of 150 people watched the Glen Waverley KFC go under the hammer last week as seven bidders pushed the price nearly a third over its reserve.

The KFC and HeyTea shop at 64-66 Kingsway sold for $9.39 million after going on the market at $7.1 million. The deal reflected a tight yield of 2.9 per cent.

Stonebridge agents Nic Hage, Rorey James, Ian Lam, Kevin Tong and Chao Zhang handled the auction where four groups competed fiercely past the reserve.

Six of the bidders were sourced through the agency’s Asia Practice team with the seventh coming from Sydney.

“A sub-3 per cent yield for a passive investment is a strong sign of market sentiment and has been a rare occurrence over the past 18 months,” Hage said.