With the listing of three strata-titled commercial and retail assets, developers Goldfields and The Schachter Group are ready to check out of a high-profile redevelopment of a former Cheltenham factory.
The properties – two ground floor retail spaces leased to a restaurant and kiosk, and an upstairs office, occupied by a counselling and mediation centre, are expected to sell on yields of about 6.00% – 6.25% per cent, for a total of about $8.5 million.
They sit at the lower levels of The Village Cheltenham (pictured top), an eight-storey residential building with 177 flats built on a 4000 square metre site which was acquired more than five years ago.
For decades prior, the land at 1228 Nepean Highway accommodated the headquarters (pictured, left) of office product manufacturing group Arnos, which is now based in nearby Keysborough.
This pocket of Cheltenham, around the corner of Centre Dandenong Road and near the Charman Road retail strip, has seen solid investment, and a wave of development, recently.
Several years ago, the Kingston City Council acquired a high-profile office next door to The Village Cheltenham. The council now occupies and part-rents out the former Fujitsu building at 1230 Nepean Highway.
A low-rise residential apartment complex, Southbay, mooted for nearby 30 Munro Street, was recently launched by ZLJ Properties with several other large residential projects also nearby.
In August, businessman Mark Economous found a buyer for a former Protestant Hall at 1261-1263 Nepean Highway, which was offered with a permit for it to be replaced with an apartment complex of eight-storeys (with the potential for the height to be increased to 13 levels).
Cheltenham is about 21 kilometres south of the CBD abutting the blue-ribbon bayside suburbs of Sandringham, Black Rock, Beaumaris, Mentone and Parkdale.
The Kingston council this year revised a 2010 Structure Plan for Cheltenham, which it considers a municipality Major Activity Centre.
In 2016, Development Victoria (which at the time was known as Places Victoria) offered a 1.56 hectare site at 329 Bay Road, which it bought in 2011 with plans to replace with a mixed-use village with an end value of about $200 million.
According to research by the Real Estate Institute of Victoria, Cheltenham now has a median house price of $1.13 million – up 7.6 per cent last quarter. For units, the median is $628,000 – slightly above the metropolitan average ($604,000).
Melbourne Acquisitions is marketing the three commercial and retail premises at The Village Cheltenham via auction and private sale.
Director Dominic Gibson said with the sheer amount of investment occurring in Cheltenham, he expected continued growth within this Activity Centre. He added that the properties come with depreciation benefits underpinned by secure brand new long leases to quality tenants.
The office – with 999 sqm of lettable area – also includes 16 car park bays. It is leased to FMC Mediation & Counselling Victoria for seven years (with options potentially adding 12 more years). FMC pays a starting net rent of $292,000 per annum.
Restaurant Squires Loft – which was established in 1992 in Brighton – occupies one of the two retail spaces. It pays starting annual rent of $180,000 on a 10 year lease (with options adding up to 25 years) for its 474 sqm premises, which is also offered with four car parks.
A kiosk, with a lettable area of 80 sqm, includes one car park. It returns a starting annual net rent of $36,000 and five year lease.
Ten months ago, Goldfields paid another local developer, Fridcorp, about $50 million for an office at 627 Chapel Street, South Yarra.