Zagame family’s office gamble goes to market
The Zagame family is selling a Hawthorn office building purchased just four years ago, at the peak of the market.
The family, who made their fortunes in pokie pubs, paid a record suburban office price of $54.28 million for 2 Luton Lane in 2019. The 5660 square metre, four-level building – on the corner of Burwood and Glenferrie roads – came with a fresh five-year lease to Swinburne University.
The site was the university’s head office at the time, but it has been unoccupied for a couple of years. However, it is not empty. The building is being sold fully furnished, which could save any future owner-occupier swags of cash.
The property is on 4104 sq m of Commercial 1 zoned land, near the university and Glenferrie railway station.
Agents have been uncharacteristically quiet about the listing, but it is understood the price guide is in the range of its last sale price. But who knows: the Zagames were lucky with their last office transaction, selling 122 Trenerry Crescent, Abbotsford, to Rick Jamieson’s Harry the Hirer business for just under $30 million – several million above expectations.
JLL agents Josh Rutman, Tim Carr, Nick Peden and MingXuan Li, along with Vinci Carbone’s Frank Vinc and Joseph Carbone, have the listing.
Owner-occupiers have been the most-active buyers of vacant or soon-to-be vacant properties. While many have been in the $5 million to $30 million price range, agents have reported potential buyers at the $50 million-plus level.
Toorak shops
Investor Brendan Sullivan is offloading a block of Art Deco shops on the corner of Toorak and Mathoura roads, which he picked up before the pandemic hit.
Sullivan told Capital Gain the five shops to be auctioned at 428 Toorak Road are all leased, with real estate agent Marty Fox – a judge’s Nine’s The Block – occupying the first-floor office. Nine owns this masthead.
Toorak Village is a hive of activity, with Bill McNee’s new St Germain project and Orchard Piper’s new apartment and office development on the other corner of Mathoura Road.
Orchard Piper paid $20 million for its site in 2021, and $67 million for a neighbouring Mercedes dealership at the rear.
Records show Sullivan paid $6.37 million for his building in 2019. The 608 sq m property is on 376 sq m of Commercial 1 zoned land, and could fetch about $8.5 million.
Last year’s big deal in the Village suggested values were heading back to 2019 levels. In July 2022, a host of directors from pharmacy giant Chemist Warehouse paid $9.25 million for the Rokk Ebony salon at 442-446 Toorak Road – about $17,225 a sq m. However, a year earlier, in May 2021, the ANZ branch at No.438-440 fetched $8 million, or around $22,591 a sq m.
The November 30 auction will provide a timely update on values at Toorak Village.
Orchard Piper has reportedly pre-sold more than 60 per cent of its office suites, and a recent deal set a new suburban record of $18,250 a sq m.
Stonebridge Property Group agents Nic Hage, Sarah Xi, Rorey James and Gill Property Group’s James Treloar have the listing.
Football Victoria
Hot on the heels of the stellar performance of the Matildas at the FIFA Women’s World Cup, Football Victoria is selling its former South Melbourne headquarters.
Football Victoria recently moved into swanky new $100 million digs at La Trobe University.
The South Melbourne building, at 236-238 Dorcas Street, served as Football Victoria’s headquarters from 1997 to 2004, before it moved to St Kilda Road and then the Darebin International Sports Complex.
The 478 sq m building, on the corner of Union Street, has a short-term lease remaining to the Australian Film Institute, the body which oversees the AACTA film industry awards.
Football Victoria chair Antonella Care said proceeds from the sale will go to a future fund set up to finance the body’s operations. “It’s been a good investment, but we’re not in the business of real estate,” Care said.
The office is on a 233 sq m site zoned Commercial 1, giving any future redevelopment up to six storeys. It goes to auction on November 22 through Gross Waddell ICR agents Andrew Greenway and Michael Gross and is likely to fetch about $3.25 million.
South Melbourne
There is a much pricier proposition nearby at 17-33 Market Street, which is expected to sell for around $22 million.
Two floors of the three-storey building are leased to Redflex, a traffic camera technology company that was taken over by NASDAQ-listed toll firm Verra Mobility in early 2021.
The 3051 sq m building, on the corner of Clarke Street, has a 4-star NABERS energy rating. It is on a 1146 sq m land parcel and comes with 29 car parks.
Records show Smorgon family members Richard Castan and Suzi Carp bought the building at the peak of the last market cycle in 2017 for $19.4 million.
Lemon Baxter agents Chris Curtain and Bill Makris and Gorman Allard Shelton agents Joseph Walton and Peter Bremner have the listing.
West Melbourne
An owner-occupier has snapped up a warehouse at 154-160 Stanley Street, West Melbourne, with plans to develop a residential project.
The price, at more than $8000 per sq m, equates to about $4 million – a 17 per cent increase in the most-recent deal in the neighbourhood and $300,000 above expectations.
Cushman & Wakefield’s Alexander Leggo, Anthony Kirwan and Leon Ma negotiated the sale of the property, which is on 496 sq m of land.
“The underbidders from our recent sales campaigns in West Melbourne really pushed new entrants in the market,” Leggo said.
West Melbourne’s Special Use Zone precinct allows a myriad of development types, including office, residential, student accommodation, serviced apartments, co-living spaces, and retail outlets, he said.
Meanwhile, a couple of blocks away near the Flagstaff Gardens, a Chinese investor who paid a record price for a 1273 sq m development site in 2015 is selling up.
The two warehouses at 33-43 Dudley Street fetched $12.1 million, or $9505 a sq m, when they last changed hands.
Next door to UAG’s newly completed 25-level Flagstaff Hill project – in the Special Use Zone – they are tipped to sell for more than $14 million.
Colliers agents Yvonne Zhou Matt Stagg and Ryan M have the listing.