Central Box Hill block with development upside trades for $13 million

EXCLUSIVE

Aston Commercial promoted the airspace potential (shaded) of the central Box Hill site.

A former Blockbuster outlet next door to Box Hill’s first major skyscraper sold at auction this month for $13 million.

It was the first time 925 Whitehorse Road has been offered for purchase in over 40 years.

When the vendor acquired the site, near the busy corner of Station Street and opposite Box Hill Central, it was tenanted to the video hire retailer.

Nowadays, it is occupied by Chemist Warehouse, which pays annual rent of $212,520 on a lease expiring in 2022.

The former Blockbuster video store at 925 Whitehorse Road, Box Hill.

On that basis, the investment is selling on a 1.6 per cent passing yield.

Aston Commercial’s Jeremy Gruzewski and Fred Nucara were the marketing agents.

The 920 square metre site was squarely marketed to builders which could consider a variety of development outcomes – residential, office and hospitality amongst them.

The purchaser is APH – the newly branded acronym for the company known in recent years as Australia Poly Holdings.

APH is directed by Jaycen Willox, whose property career includes stints at Coles, ING and SCentre, as well as with major commercial agencies, CBRE and JLL.

“APH is thrilled with the acquisition of 925 Whitehorse Road,” Mr Willox told realestatesource.com.au. “APH believes that this is the best location in the Box Hill Metropolitan Activity Centre (MAP) with so many possibilities”.

“The opportunities for retail, food and beverage, hotel and commercial space in this location are endless”.

APH will replace 925 Whitehorse Road with a high-rise office atop lower level retail.

The property is next door to the 20-storey office, 913 Whitehorse Road, constructed for the Australian Tax Office in 2015.

Deague Group has recently completed the suburb’s tallest building – soaring 36 levels – as part of its Whitehorse Towers complex at 850 Whitehorse Road.

Building burst coming to Box Hill

The office at 19 Prospect Street, (shaded) relative to central Box Hill developments.

Numerous other residential buildings of more than 25 storeys are mooted for the area.

In May we reported that a China-based developer paid $14.1 million for a 2061 sqm site at 12-16 Shipley Street which, like 925 Whitehorse Road, is within the Box Hill Activity Centre.

A low-rise office at 19-23 Prospect Street (pictured, right), marketed for its “significant development potential”, also sold that month, for $22 million.

Earlier this year, a builder paid $11 million for 25-29 Ellingworth Parade.

Ten months ago, we reported that a Hong Kong apartment developer who had never invested in Melbourne spent $29.5 million on the St Paul’s Lutheran Church at 711 Station Street. This 2597 sqm holding, opposite Box Hill Gardens, exchanged for about $9 million over expectations.

Last year we reported that Orion International would construct a 29-level mixed-use building, with apartments and classrooms, at 16-18 Spring Street.

A China based apartment builder also paid $13.5 million for a 1653 sqm holding at 31-35 Prospect Street. A local developer paid $8.25 million for a 1004 sqm plot at #13 a few months later.

Three towers, rising 17, 30 and 37 levels, and containing apartments and a hotel, are earmarked to replace 845-851 Whitehorse Road: a former haberdashery offloaded as a permit-ready opportunity for $50 million in 2017 by Spotlight Group owners including Zac Fried and his uncle, Morry Fraid.

Also in 2017, two low rise offices, at 15-17 Prospect Street and 22-24 Prospect Street, sold within four days of each other. Two apartment builders outlaid a total of $22.7 million for these blocks.

Developer R&F Property is proposing a 25-floor residential building at 9-11 Prospect Street, a 1465 sqm site it acquired as a permit-ready opportunity for $17.6 million in late 2016.

Box Hill becoming Melbourne’s second CBD

The 925 Whitehorse Road selling agent, Box Hill local, Jeremy Gruzewski, said the suburb is becoming Melbourne’s second CBD.

“The concentration of commercial, hotel and residential towers in Box Hill, which is superbly supported by excellent public transport infrastructure, offers an exciting opportunity for all stakeholders,” the agent added.

Colleague Fred Nucara said that with the lease to Chemist Warehouse expiring in three years, the vendor saw now as the perfect time to offer 925 Whitehorse Road.

The block offered the quinella of holding income plus major development upside.

Box Hill is about 14 kilometres east of the city. It has been classified as a major activity centre by various state governments for decades.

In May, we reported that APH outlaid $45.85 million for an office complex, at 347-351 Burwood Highway, Forest Hill, next door to another commercial asset it acquired from Hewlett Packard Enterprise for $88 million in 2018.

These Forest Hill sites are expected to be master-planned into a residential housing estate.

APH to replace Box Hill site with an office

Mr Willox said 925 Whitehorse Road “is the perfect location to attract renowned international commercial tenants from all over the world”.

“Our property…is a very valuable piece of commercial real estate and we will not be surprised if it attracts the highest rental per square metre in Box Hill MAC, even surpassing CBD rentals.

“We are very fortunate to be able to have the opportunity to acquire this property which has been held by the previous owner for over 40 years”.

“We are looking forward to some amazing activation and making the next generation proud for the next 100 years.

Mr Willox said APH will work with council’s revised direction of the Box Hill MAC “to bring many exciting offerings to the public and community”.

“APH believes in the future of Box Hill as we continue to invest into City of Whitehorse,” Mr Willox said adding that the developer owns five strategic locations there, which “places great emphasis on sports, leisure, art and culture, education, medical and early childhood learning.

“We look forward to working with council and other stakeholders in order to maximise community benefit to the Whitehorse residents”.

The 925 Whitehorse Road deal isn’t the first time a former commercial agent has snapped up a prime Box Hill site.

Former Colliers director turned developer, Tim Bolton, recently completed construction of an office at 120 Thames Street, Box Hill, which was on-sold to MS Limited for about $9.5 million last year.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco