Macau investor snaps up Moorabbin showroom for $21.8 million

EXCLUSIVE

Freedom Group Limited, controlled by Greenlit Brands, has sold a high profile large-format Moorabbin retail asset for $21.8 million.

A Macau investor is picking up 1000 Nepean Highway, opposite Moorabbin Homemaker Centre, about 15 kilometres south east of the Melbourne CBD.

The recently refurbished double storey showroom at the south east corner of Worthing Road has been occupied for more than 15 years by two retailers: Freedom and Barbecues Galore.

The 4376 square metre facility with 65 basement car parks occupies a 3485 sqm plot passed daily by about 60,000 vehicles.

Based on the annual rental return ($1.153 million), the asset is trading on a 5.29 per cent passing yield.

The sale price values every sqm of building at almost $5000, Savills Nick Peden, Jesse Radisich and Benson Zhou added.

The property was listed after Freedom recently committed to a 10 year lease.

Greenlit also owns eight manufacturing sites and a logistics business.

Late last week the Richmond based retailer posted a $287 million loss for the 2019 financial year.

Greenlit, which also controls Fantastic Furniture, OMF, Plush and Snooze, sold Harris Scarfe to Allegra Funds last year.

Harris Scarfe almost immediately after entered voluntary administration.

Five months ago Steinhoff Asia Pacific renamed itself Greenlit Brands and reportedly began to raise $300 million to operate independently from Steinhoff International, its Johannesburg listed parent.

Steinhoff International in 2017 discovered a $A9.2 billion black hole following years of accounting errors.

Last year the offshore group wrote down $A18 billion in assets.

Freedom Group Limited paid $8.4 million for the Moorabbin asset in October, 2004.

It previously sold for $2.15 million in 1998.

Barbecues Galore is committed to the property until 2024.

Buyer sourced from Savills’ Macau office

Mr Peden said the 1000 Nepean Highway sale was “a textbook example of how exposure to vast global networks and the ability to unlock offshore capital can directly correlate to achieving a premium result”.

In this instance, the agent added, the buyer was sourced directly from Savills Macau office.

“Despite a range of negative commentary regarding the retail sector, properties in proven locations with secure lease covenants are transacting quickly and at strong prices,” Mr Peden said.

“Throughout the last quarter of 2019, retail sales account for 50 per cent of the Savills Melbourne transactions, signalling the direct influence the low interest rate climate is having on the retail market”.

The agents said that following the Moorabbin deal, it has a book of local and offshore under bidders “awaiting another major retail opportunity”.

“Demand for prime assets throughout Melbourne is as strong as it ever has been, and the sale result of this trophy retail investment attests to that”.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco