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Archive for News

Retail giant eyes new Leopold site

Australian retail giant Harvey Norman has confirmed plans to build a third Geelong store after securing a strategic landholding in an $11m deal.

The retailer purchased a 6722sq m farm property on Melaluka Road, Leopold.

Though the property is zoned as farming land, it is Geelong council’s preferred expansion path for the neighbouring Gateway Plaza shopping centre.

A Harvey Norman Holdings spokesman said the first stage would be a large formal retail development anchored by a Harvey Norman franchise, to be co-located with multiple other retailers.

The project is estimated to be delivered three years from now, he said.

“We have been watching the Geelong region for an extended period, searching for the right opportunity,” the spokesman said.

“Leopold is strategically and centrally located on the Bellarine Peninsula.

“There is already a successful shopping centre and Bunnings adjoining the site.

“There is a strong and growing population catchment on the peninsula. The catchment warrants a Harvey Norman store, and local customers have a lack of local large format retail offers.”

The region’s third Harvey Norman store would join Bunnings, Kmart, Coles and Aldi as the anchor tenants. The site doubles the size of the retail precinct at Leopold.

Billionaire co-founder and Harvey Norman Holdings chairman and executive director Gerry Harvey and chief executive officer Katie Page visited Geelong to inspect the Leopold property before proceeding with the purchase, Darcy Jarman selling agent Tim Darcy said.

The $11m deal was settled after the company completed due diligence to ensure it could redevelop the site, which has frontages to Melaluka Rd and Clifton Ave, Mr Darcy said.

He said an expressions of interest process attracted more than 100 direct inquiries, and although there was significant interest from investors seeking to create a turnkey development site, Harvey Norman emerged as the most likely buyer.

“Harvey Norman are very well serviced in the Geelong region to the north and to the south but haven’t got a presence out to the east,” Mr Darcy said.

Bellarine Peninsula towns have been heaving amid record population growth in recent years.

“That’s why these sub-regional shopping centres and homemaker centres work quite effectively,” Mr Darcy said.

“Look at the growth in Leopold, Drysdale, Ocean Grove, Point Lonsdale, Indented Head and St Leonards. That whole centre will gather some impetus.”

Harvey Norman’s expansion plans comes as US retailer Costco revealed it was eyeing potential sites for three new Victorian stores, including in Geelong.

Charter Hall Retail REIT acquired the Gateway Plaza shopping centre in 2019 from Vicinity Centres which completed a massive expansion program.

Prime site hit the market

Landmark properties offered in Geelong West and Ocean Grove provide opportunities to leverage their size and position for multi-storey residential developments.

The commercial sites have hit the market and attracted strong interest from developers and other groups.

A two-storey tenanted investment at 68 The Terrace, Ocean Grove, offers real development potential with a 13.5m height limit offering uninterrupted ocean and Barwon River views.

The property is expected to attract offers above $3m.

Darcy Jarman, Newtown agent Andrew Prowse said there are secure leases, with demolition clauses, for the long-term tenants, RT Edgar and Ocean Grove Cellars, generating more than $124,000 a year.

But Mr Prowse said the highest and best use of the 606sq m property was in a mixed use redevelopment capitalising on the commercial position with office and residential apartments on up to four levels.

“There is a lot of under-utilised land at the rear that can and will be eventually developed on and you are one of only 11 properties on the east side of the road that can go 13.5m, so you will get virtually uninterrupted views of the water,” Mr Prowse said.

“You may even have a level of office, but you will certainly keep a retail presence at grade, potentially an element of office given the lack of availability in that precinct and then using the views from the higher levels, three and four if you like, towards the water and the Barwon river where you will achieve some strong residential rates.”

Mr Prowse said there is a mix of interest, including local, Melbourne and interstate investors and developers.

“Those key commercial precincts on the Bellarine Peninsula are running at next to zero vacancy rates and I can’t see that changing any time soon given that level of demand from a residential perspective down there.”

Expressions of interest close June 1 at 3pm.

Ariston House for Lease

ONE of Geelong’s most spectacular historic homes is on the market for new tenants.

Ariston House, a circa 1891 Pakington St villa, had served as the city’s early childcare service, including a neighbouring childcare centre since the mid-1990s, but the building was no longer required as an administration base, leasing agent Tim Darcy said.

The City of Greater Geelong will remain the landlord for the building at 246 Pakington St and continues to operate the neighbouring Ariston Early Learning Centre next door.

Ariston is one of a number of landmark 19th century homes in the area, with builders transforming Armytage House for its new owners, while across Pakington St, the owners of Rannoch House have listed the 22-room mansion for sale with price hopes north of $11m.

A double-storey brick residence, Ariston House was built in 1891 for mining company entrepreneur and investor James Randell to an eclectic style design by Melbourne architect Phillip A. Kennedy.

An elaborate cast iron balcony, veranda and fence dominate the 10-room villa built in a style from the English Late Victorian Aesthetic movement.

Mr Darcy said the property was expected to fetch a lease of about $150,000 per year on an as-is basis.

“But that could vary depending on what additional works a tenant might want to suit their particular requirements,” he said.

A key component to the building is the attached car-park, which has off-street spaces for 21 cars.

There has already been keen interest in leasing the building, Mr Darcy said.

“It’s been utilised and occupied by the City of Greater Geelong for well over the past 20 years, in conjunction with the adjoining child-care centre that they operate,” he said.

“But they no longer have a requirement for the administration side within that building.”

Mr Darcy said it was perfectly suited for professional offices, consulting rooms and an educational facility.

“It’s obviously an older style building that’s got a lot of separate offices and suites and rooms within it and is supported with a significant carpark component,” he said.

“Finding carparking with any commercial requirement today is not easy to fulfil, but this one has got good parking.”

Mr Darcy said there had been a good initial response from some local professional parties.

“All are organisations that would have a requirement for a building as a whole,” he said.

“There is about 450sq m in gross floor area inside. By and large it’s going to suit a single tenant.”

Butcher gets his prime site

OWNERS of a landmark Newtown butcher shop have secured the freehold to the store that has been held in one family more than 50 years.

They emerged with the contract for the corner property at a robust auction that pushed the selling price above $1.5m.

But they had their work cut out for them as a host of potential buyers lined up for the opportunity to land the prime corner property.

Darcy Jarman Newtown agent Tim Darcy said almost 90 groups made inquiries on the property at 17 Stinton Ave.

“It’s an iconic property and it’s had an iconic business in it, although with three different proprietors over a long period of time, but iconic both in terms of the operation of the business and by nature of its freehold position within Newtown,” Mr Darcy said.

“We had nearly 90 inquiries and there was probably 15 parties there to bid on the day.”

Five parties raised a hand at the auction, which opened at $1m.

Auctioneer Raoul Salter declared the property was on the market and selling as the reached $1.44m.

But that only attracted more bidders into the action.

It ended up selling for $1.512m.

Mr Darcy said it achieved a 3.66 per cent yield, with a land rate of almost $8000 per square metre.

Buyer’s advocate Tony Slack revealed he was acting on behalf of Enzo Raimondo, who had worked at the butcher shop for 35 years, eventually taking over the business, Enzo at Penny’s.

Mr Darcy said while it was a prime investment property in terms of holding and potentially adding value, at the end of the day it meant more to the motivated tenant.

“Clearly with a business in situ like that, when the tenant is in a position and wants to buy it, it means more to them than anyone’s eyes,” he said.

“Particularly at the pointy end there was two other parties driving it pretty hard.”

The vendor was Denis Penny, son of the late proprietor Henry Penny.

“In the end a really pleasing outcome that Enzo was able to get it,” Mr Darcy said.

“The fact the tenant has got the resolve to go and buy it. He’s not going anywhere and people knew the business was not for sale and he’s not going anywhere, so all those things help in the end.”

MEANWHILE a large-scale Grovedale shop attracted a big price when it sold for $3.36m at auction.

The tenanted investment has been leased to the Brotherhood of St Laurence for 25 years and attracts a $129,600 a year rent.

The community store recently signed a three-by-three year lease on the property at 129-124 Torquay Rd.

The 2007sq m property has a 30m frontage to the Surf Coast Highway and comprises two titles.

Bidding opened at $2.5m and attracted interest from several bidders.

Gateway sites whet appetites

A PLAN to have 12,000 people living within Geelong’s central business district by 2030 has turned the spotlight on potential development sites.

Two near the northern gateway to the city centre have been listed with potential developers and owner-occupiers interested in the possibilities.

Gartland Property director Michael De Stefano said the opportunities were clear.

“They’re the gateway into the CBD and a stone’s throw to the water,” he said.

“There is a big mandate to create 12,000 people habitating within the Geelong CBD over the next seven or eight years, so we are going to see more of this type of product coming into the eyes of developers because there will be a big market for it.”

Development of the sites were part of creating a thriving and energetic CBD.

“The car yards are evaporating, so the future of that eastern side of Mercer St will be residential or mixed use development,” he said.

“You can see why. You basically head one street down and you’re at the water.

“Then you travel a little bit south and you’re in the dining precinct or the arts precinct.”

The precinct already has runs on the board, with a huge uptake for the Mercer and Miramar apartments projects, with further development planned for the former Winter & Taylor site. Between the two there was about 250 apartments that all sold prior to construction. It’s proven the appetite of the market is there,” Mr De Stefano said.

“And I think there’s further towers planned, based on a further demand.

“We’re talking 12,000 people by 2030, so the depth of the market has still got a substantial way to go.”

The first of the development sites is at 15 York St, at the corner of Mercer St.

The 846sq m site has an Activity Centre Zone and is next to a row of apartments and townhouses. Price hopes are low to mid $2m for the site.

The property has a month-by-month tenant.

“This will suit probably a mixed-use scenario with a little bit of showroom or office with apartments upstairs,” Mr De Stefano said.

Darcy Jarman, Newtown agent Tim Darcy said the key to a bigger 2022sq m site was five separate street frontages covering 165m.

The parcel comprises addresses at 5-11 Mercer St, 4 Sadler Place and 2-6 Ginn St, Geelong, with additional frontage to two rights-of-way.

It’s being offered by an expressions of interest campaign with vacant possession but based on recent residential land sales in the area, it could attract interest above $7m.

Mr Darcy said it provided an enormous amount of flexibility to any development scheme.

“It’s included within an activity centre zone, so there is a raft of different things that could suit, but probably the highest and best use would be for residential purposes,” Mr Darcy said.

The draft Central Geelong Framework Plan lists the preferred building height for the site at 21m, with a 16m street frontage, providing for between four and six storeys. It previously had a 15m preferred building height.

“All that is under ministerial review but you’ve got the opportunity to do something quite unique and of an up-market nature given the aspects that you are going to be able to create over the bay,” Mr Darcy said.

“You’re going to have good northerly, easterly and southerly vistas and probably reasonably to the west.

“You’re walking distance to all our key feature sports within the activity centre, being Deakin, the train station, Westfield and so forth.”

Good medicine with pharmacy

A LANDMARK pharmacy on a high-profile Belmont corner has sold for more than $2.8m after an auction.

The strong fundamentals behind the 195sq m property at 145 High Street encouraged buyers to bid hard for tenanted investment being offered for the first time in 35 years.

A Sydney investor secured the property for what the Addy understands is a sub-4 per cent yield.

Two parties contested the auction, which rose from a $2m start to $2.8m in 50 seconds. Auctioneer Raoul Salter could not entice further bidding and passed the property in.

Darcy Jarman agent Tim Darcy negotiated the sale immediately after. He would not disclose the higher price.

Mr Darcy said the campaign generated more than 70 inquiries and the crowd included a number of buyers looking to procure it.

“There was quite a few there that didn’t get to bid because it went in a very manic fashion in $100,000 increments,” he said.

The pharmacy had operated since 1986, he said.

“It’s got a proven track record and it’s attached to a medical centre with a further pathology and radiology clinic next door to that.”

The property generates an annual income of $113,417.

The sale price is higher than recent High Street transactions, including $2.5m for the former Hungry Jack’s site, which has become home to Daniel’s Donuts, and $2.16m for the home to Belmont’s Bendigo Bank branch. Both properties have a larger footprint.

Why a two-storey office block in Geelong is better than a bank

A TWO-STOREY office building in central Geelong is better than a bank at the moment, given the current low savings interest rates.

The well-presented building with 761sq m of floor space is being offered at auction as a freehold investment opportunity.

Darcy Jarman, Newtown, agent Tim Darcy said the 600sq m property at 15 Little Ryrie Street, Geelong, offered buyers a set-and-forget opportunity for the short to medium term.

Mr Darcy said the freehold property was in an activity centre zone, which presented a long-term value opportunity.

Not-for-profit disability, ageing and community service provider GenU has recently signed a new five-year lease, with an option for an additional year, providing annual rent of $135,000, with fixed 3 per cent annual increases.

Mr Darcy expects the property will sell in the high $2m range.

The property is on the north side of Little Ryrie Street, next to Centrelink and the Australian Taxation Office, and close to St John of God Hospital.

Surrounding development comprises predominantly established commercial premises of mixed age and construction, and secure residential apartment complexes currently under construction.

“It’s about as good as it gets as a set-and-forget investment in the short to medium term,” he said.

Mr Darcy said interest was solid, with local and external buyers.

“They’re very much looking at a secure passive investment, with a secure recurring income,” he said.

“First and foremost, they’re looking for somewhere to park money and get a return on their capital.”

Mr Darcy said the freehold property was serviced by two street frontages to Little Ryrie Street and Cuzens Place.

The 604sq m land component has potential long-term redevelopment scope, which is enhanced by its freehold status.

The original part of the building is double brick, with a rear extension completed six years ago with a concrete tilt panel construction.

The building presents in excellent condition throughout and comprises open-plan office space, partitioned offices, meeting rooms, training rooms, a kitchenette and toilet/ bathroom facilities.

Undercroft carparking and a storage area at the rear includes eight car spaces.

The property goes to auction on March 31 at noon.

Demand increases for small warehouses

Geelong’s massive population growth has spawned a booming industrial sector amid demand for warehouse space.

The changing shape of our newest suburbs means demand for warehouse and office space in the region’s industrial estates has never been higher.

And property investors and developers have come to the party with a booming construction pipeline.

Projects range from subdividing existing properties to unlocking large tracts of land to build new business parks.

Darcy Jarman, Geelong West agent Tim Darcy said the changing shape of the region’s economy from manufacturing to white collar services preceded the growth in population.

“When you have that level of growth, what happens after the growth in the domestic market is the requirement for ancillary amenities like the retail, commercial and industrial sectors.

“The industrial demand is all coming from warehousing — predominantly from at the small end of the scale but it’s cascading up.”

Mr Darcy said the urban expansion to Geelong’s south has sparked the industrial boom, with 150,000 new residents anticipated by 2036.

But the changing shape of the new suburbs is also driving the industrial sector.

“They’re cottage blocks — they’ve gone away from the conventional blocks that might have been 700 to 800sq m, up to 1000sq m to 1200sq m,” Mr Darcy said.

“So people’s ability to house their trailer, boat or caravan at home becomes increasingly difficult.

“These smaller warehousing is attractive because you can suit various needs and they also suit smaller tradespeople.”

Small businesses were also selecting less conventional locations, incorporating warehousing and free parking into their offices, he said.

“If you look at the projections and what’s in front of it, it’s only starting.”

The development is concentrated in Geelong’s main industrial precincts — Breakwater, South Geelong, North Geelong and Grovedale, with some work also at Moolap and North Shore.

Areas like Heales Road is better for larger format projects, like logistics and distribution, Mr Darcy said.

Investors in the market can bank on good organic value growth with new industrial land suited to smaller warehouses not expected to become available for at least a decade at Armstrong Creek, he said.

Melbourne developer Wilmac, which has 30 years experience in the industrial and commercial property space, recently entered Geelong with a business park comprising 70 office, warehouse and storage units at Breakwater.

The first stage comprising 22 units has opened at Industria, with construction of stage 2 starting this month.

Wilmac director Chris Wilkins said the premier business park had been well received by the market, with owner-occupiers, investors and tenants securing space.

“We’ve watched this market closely over the past few years and felt the timing was right for us to deliver our trademarked Industria brand,” Mr Wilkins said.

Mr Darcy said owner-occupiers and tenants represent a good cross section of Geelong business at the park, while investors were getting returns up to 6.3 per cent.

Strategic plays near arterials

GEELONG buyers have made strategic plays for industrial and mixed use land fronting arterial roads in the city’s southeast.

Local interest placed a higher premium than Melbourne buyers on the sites fronting Portarlington Road, Moolap and Barwon Heads Road, Charlemont.

Darcy Jarman, Geelong West agent Tim Darcy said a local investor secured the home of Corio Waste Management at 41-49 Wills Crescent, Moolap.

The 11,441sq m industrial site had sold at the upper end of the $2.5m to $2.75m quoted price range, Mr Darcy said.

CWM has a new five-year lease with options to 2040.

“It was a secure investment, it was basically a good land bank with cash flow,” he said.

The site is near the eastern end of the planned Geelong Ring Road extension.

Geelong developers paid more than $1.5m for a 200m frontage to Barwon Heads Road at Charlemont.

The strategic nature of the 1.5ha property would become evident through the Marshall precinct structure plan, he said.

“When the plan gets rolled out they will look to develop that site,” Mr Darcy said.

Lab secures COVID-19 testing centre for up to two years

A DRIVE-through COVID-19 testing centre has ended a long search for a tenant for a landmark corner in Geelong’s inner west.

Australian Clinical Labs has opened the testing centre after signing a 12-month lease, with a 12-month option, on 241 Pakington Street, Newtown.

Darcy Jarman, Geelong West, leasing agent Denham Humphreys said the corner location at Aberdeen Street made it a walk-up start for the pathology firm.

“It’s a very high exposure corner, the amount of traffic that goes past there is amazing.”

The agents were seeking $80,000 a year in rent for the 541sq m property, achieving a price close to that, he said.

“The interest that we had was for the exposure side of things. It was good for Clinical Labs on that front. The access point from either side allowed for drive-through,” he said.

“They’ve set up a marquee out the front, so even if it was wet conditions, it can still be done quite well. They have full signage now, it’s very good exposure for them.”

Mr Humphreys said retail and particularly small warehouse space leasing was operating “surprisingly” well, considering the COVID-19 Stage 3 measures in Geelong.

“The leasing market is still ticking over really well. Surprisingly so. It went quiet during initial lockdown period,” Mr Humphreys said.

“The retail space tends to be moving and we’ve got good movement with warehouses, particularly small warehouses.”

 

Strategic location drives $5M-plus sale

FUTURE development prospects underpinned strong interest in a strategic South Geelong transport hub that’s sold for well above $5 million.

The long-term home of the McColl’s transport company forms part of the 22,462sq m site that was snapped up by a local investor.

Darcy Jarman, Geelong West agent Tim Darcy said the agency received up to eight different offers for the adjoining properties at 92-96 Wood Tce and 57 Wood St, South Geelong.

They generate an annual rental income of more than $400,000 from tenants McColl’s and Allied Pickfords.

The properties were offered either separately or together as part of an executers’ expressions of interest campaign and Mr Darcy said both options attracted buyers from Geelong and further afield.

“In the end when we shortlisted some potential purchasers that we wanted to deal with, all had an appetite to buy it in one line and that is what happened,” he said.

He could not reveal the sale price but said it was closer to $6 million than $5 million.

Mr Darcy said the combination of established tenants and the chance to unlock the future potential of Strategic location drives $5M-plus sale the large, corner site drove up the value.

The landholding is open to more intense development once the lease agreements expire.

“I think it was a number of things that attracted buyers,” he said.

“The property was very much a strategic site with industrial zoning in that very prominent corner.

“The McColl’s business has been there in some shape or form since 1964, the other tenant has been there about seven or eight years.”

McColl’s holds a three-year lease, with a further five-year term, while Allied Pickfords is 18 months into a seven-year lease, with two further five-year terms.

Mr Darcy said there remained good demand for quality industrial property in Geelong.

“For well positioned, well leased property there is still an appetite,” he said.

The Barwon Tce site comes with a 2090sq m warehouse/depot and wash bays, while the 57 Wood St offers a building area of 2930sq m, plus a canopy.

High St draws investors for better returns

Direct property investments in areas like High St, Belmont are making more sense for buyers watching interest rates and share market values wane.

Five buyers contested the home to Bendigo Bank’s Belmont branch at 142-146 High St, which sold for $2.16 million at auction last week, for a 4.64 per cent yield.

Darcy Jarman, Geelong West agent Tim Darcy said interest came from Geelong and Melbourne investors, with a local securing the contracts.

The bank last year exercised a 3-year option on its lease since 2004. It pays $103,500 in rent.

“It’s a big building on a big parcel of land but it’s in a very dominant position,” Mr Darcy said. “It’s right near the corner of Regent St, directly opposite the Aldi car park and only 100m down the road from Coles. So it’s the bees knees in terms of prominence and location within the precinct.”

The sale will augur well for a forthcoming auction of a smaller property at Shop 4, 165 High St near the library.

The 53sq m shop is leased to long-term tenant Yummy Mummy Lolly Shop, which is on a new 7-year lease with a $14,280 annual rent.

It goes to auction on March 26 with $300,000 price hopes.

“This will be for smaller investors, self-managed super funds, because it’s affordable.

“Investors that have got a surplus level of funds in respect to where rates have retreated to and the recent wind back in the capital value in the share market, are still looking for direct property investments, provided they have the right location, the right lease and the right covenant,” Mr Darcy said.