Capital Gain
Fresh from splashing $183.5 million to snap up the St Germain project in Toorak Village, the billionaires behind Spotlight and Anaconda have finally offloaded a patch of dirt in Chapel Street that they own.
And in an interesting quid pro quo, the buyer is understood to be none other than prolific property developer Bill McNee.
McNee was the developer who sold the St Germain complex to the Fraid/Fried family this week. Their Spotlight Retail Group owns crafts retailer Spotlight, outdoor chains Anaconda and Mountain Designs, and the Harris Scarfe department stores, giving them estimated wealth of about $5.01 billion.
It’s understood McNee paid more than the $60 million asking price, about $65 million, for the block at 402-416 Chapel Street.
Morry Fraid and his nephew Zac Fried bought the site for $1.51 million in 1983 when the strip was on the verge of a retail renaissance. The row of shops and first-floor offices was demolished a few years ago to make way for apartments.
The 3306-square-metre site is close to the Gurner-led Jam Factory redevelopment and the state government’s social housing rebuild.
Cushman & Wakefield’s Daniel Wolman is understood to have closed the deal for the huge chunk of development land but he declined to comment. Wolman and colleagues Nick Rathgeber, Leigh Melbourne, Oliver Hay, Mark Hansen and Leon Ma negotiated the St Germain transaction.
The 12-storey 13,000 sq m mixed-use St Germain project at 505 Toorak Road includes office space for upmarket real estate agency Kay & Burton, property developers the Deague Group, one of Tim Gurner’s St Haven wellness centres, Cecconi’s restaurant and a busy Coles supermarket.
That deal was struck on a 5.5 per cent yield, which could have been sharper if the original $200 million asking price had been reached.
McNee finished the project three years ago and in doing so helped put an end to the worn-out atmosphere which had permeated Toorak Village for decades.
The Sivasli Group, which has undertaken projects with James Packer’s NPACT group, is planning to build a new family office next door to St Germain at 509-515 Toorak Road. NPACT is also involved in Orchard Piper’s new $400 million luxury apartment project across the street.
Big-box buy
Listed furniture retailer Nick Scali has snapped up Coco Republic’s 500 Church Street showroom for a record $22 million.
The deal, setting a land rate of $21,421 a sq m and a building rate of $11,369 a sq m, reflected a razor-sharp yield of 3.05 per cent.
While the Cremorne office buildings are renowned for their high-tech tenants, the showrooms on the strip have evolved into a designer furniture hotspot over the past 30 years.
Coco Republic has leased the 1935 sq m building since 2000 and has three years remaining on the lease. It’s next door to Alfasi’s new office at 510 Church Street near East Richmond railway station.
Records show high-profile Gold Coast investor Frank Picone bought the building in 2009 for about $6 million. A caveat over the property revealed the buyer’s identity.
Cushman & Wakefield’s George Davies and Oliver Hay negotiated the off-market transaction but declined to comment on the buyer or vendor.
However, Davies said the deal highlights strong demand from occupiers to hold their ground on one of the country’s most tightly held retail destinations.
Six months ago, the Cushman team sold 575 Church Street to a group of Chemist Warehouse execs and directors for $4,725,000 – $1,925,000 over the reserve.
Drive buy
Motor magnate Nick Theodossi has stumped up $18.05 million for the Clyde North Dan Murphy’s and a Nido Early School creche.
It’s the second deal at the new Meridian Village development on the corner of Thompsons Road and Matterhorn Drive about 45 kilometres south-east of Melbourne’s CBD.
Late last year a Chinese investor paid $5.9 million for a Guzman y Gomez outlet at the project, developed by the Griffith Group.
Next up is a new freestanding large-format retail centre anchored by Petbarn, Supercheap Auto and Jaycar.
Stonebridge’s Justin Dowers, Rorey James and Kevin Tong ran negotiations.
Big health
Healthcare behemoth Ramsay Health Group is selling a boutique private hospital in a plum location in Hawthorn’s Grace Park Estate.
The 37-bed hospital is on a large 4780 sq m site at 29 Hilda Crescent, It’s opposite the Hawks footy team’s former eyrie, Glenferrie Oval, and close to the pool and the busy Glenferrie Road shopping strip.
Records show the triple-fronted property last changed hands in 2022 when the Melbourne Orthopaedic Group sold it for $25 million.
The tiny hospital is likely to attract another healthcare user or a developer and should fetch more than its last price given the blue chip neighbourhood.
CBRE agents Sandro Peluso, Marcello Caspani-Muto and Jimmy Tat declined to comment on the vendor or the likely price but were enthusiastic about the property and location.
“You cannot understate the value of existing hospital infrastructure, even if it’s converted for an alternative use,” Peluso said.
Upheaval in the private health sector, triggered by the collapse of Healthscope last year, is likely to bring more properties to market.
Healthscope, bought by Canadian property giant Brookfield in 2019 for $5.7 billion, has sold a slew of hospitals. Ramsay Health Care has paid $251 million for Canberra’s National Capital Private Hospital; Calvary has bought the Hobart Private Hospital and Holmesglen Private Hospital; and Mater Health has picked up the Gold Coast Private Hospital.
But there are still pickings at the smaller end. In May last year, just before it went into receivership, Healthscope listed an ageing rehab facility at 134-146 Ford Street in Ivanhoe.
Records show residential developer More Capital Group’s Jacob Gilmore paid $7.7 million for the 7272 sq m property, which has a 46-bed hospital and a historic mansion. JLL’s Jesse Radisich, Josh Rutman, Mark Stafford and Mingxuan Li got that deal out of rehab.
Small pharma
Sydney-based developer Abadeen has snapped up the Hawthorn headquarters of the Pharmacy Guild of Australia, paying $16.82 million for the 1300 sq m site.
The three-level office at 40 Burwood Road – not far from the Hilda Street hospital – faces the south-eastern corner of St James Park and backs on to Hawthorn railway station.
Colliers agents Alex Browne, Ben Baines and Eddie Foulkes, who did the deal, said the campaign attracted six offers from a range of owner-occupiers, investors and developers. Lachal Property acted as transaction adviser.
Abadeen is planning to demolish the 1954 sq m office and replace it with a multi-story project. The deal potentially marks a change in direction for the suburban office market, where owner-occupiers have dominated over the past three years.
“We had owner-occupiers come through who hadn’t been in the market for five years. They’re still willing to buy,” Browne said.
But ultimately, they were beaten by the freshly enthused development sector, encouraged by the state government’s new planning rules.
“The sale campaign was launched shortly after the state government designated a maximum proposed height of eight storeys for 40 Burwood Road. This encouraged strong levels of interest from residential developers who outbid owner-occupiers and office investors for the 1980s office building,” Baines said.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.
CLARIFICATION
This story was updated after further information became available detailing the $65 million acquisition price for the Chapel Street property.
