Ex-Salvation Army HQ a counter cyclical buy
The biggest and highest profile commercial building in the quaint Mont Albert Village is for sale again.
At 3-7 Hamilton Street, the triple storey, 3720 square metre office with 114 basement car parks carries $20 million-plus price hopes.
The family of businessman Frank Hargrave, who died in December, 2021, is the vendor; through his Larkfield Group, the asset cost c$27.85m, reflecting a sub six per cent yield, earlier that year.
That seller, a partnership comprising Troon Group and MaxCap, had just completed a multi-million dollar renovation, bringing the office quality to Prime grade, the second best available after Premium but better than A.
It also offered the asset fully let to two tenants; the weighted average lease expiry was 3.5 years.
Between 1994-2007, 3-7 Hamilton St was owner occupied as the Salvation Army headquarters.
High fully let market yield
Neither tenant which filled 3-7 Hamilton St in 2021 renewed.
Only one floor was subsequently let – earning $576,179 per annum net.
Fully leased, the building’s annual revenue would surge to $1.75m, according to Lemon Baxter’s Paul O’Sullivan, who is marketing the asset with Hans Fan (story continues below).
“To replicate a building of this calibre today would cost in excess of $25m,” he said.
“Buyers are essentially acquiring it below replacement cost, offering a rare chance to secure a premium asset at a competitive price point,” he added.
“With interest expected from yield driven value-add investors and those willing to take on the challenge of leasing up the remaining floors, there’s expected to be strong competition.
“For the savvy investor willing to seize the opportunity and capitalise on the potential returns, this represents a rare chance to secure a high yield in a thriving suburb like Mont Albert”.
Between Camberwell and Box Hill
On a 1573 sqm Commercial 1 zoned block, 3-7 Hamilton St is near the recently opened Union station, which saw the closure of Surrey Hills and Mont Albert stops, which were considered too close.
Box Hill – considered Melbourne’s second city and with a skyline of apartment towers, and, soon, a 25 storey office, care of Vicinity – is the next stop east of Union.
Camberwell – three stops west of Union – is another major established activity centre.
Subscribe to our newsletter at the bottom of this page.
