Capital Gain
One of Melbourne’s biggest pokie pubs, the Bundoora Hotel, is on the market with a price that plays, spins and jingles into the mid-$60 millions.
Mazen Tabet, one of the city’s most active hotel investors, part owns the pub, records show. He has recently been pumping cash into inner-city venues.
Tabet spent around $25 million buying a 12-suite boutique hotel on Domain Road, South Yarra. He also owns the Royce, Adelphi and Lyall hotels.
Leased to the dominant ALH Group, the Bundoora pub is the sixth most lucrative pokie pit in Victoria and sits on a jackpot-sized 7959-square-metres at 49 Plenty Road, just south of the Ring Road’s on/off ramps next to the Bundoora Square shopping centre.
It’s one of a handful of Melbourne pubs that could come close to the prices similar hotels in Sydney achieve.
Last month, the Ryan family in Sydney paid around $100 million for the Royal Oak Hotel in Double Bay and Gallagher Hotels bought the Oaks Hotel in Neutral Bay for more than $130 million.
In Melbourne, the Settlement Hotel in Cranbourne fetched about $60 million in 2023, and in 2022, the West Waters Hotel in Caroline Springs sold for $85 million.
Records show Tabet and his investment partners paid $6.082 million for the pub in 1995, shortly after gaming machines were allowed in Victoria.
ALH’s current lease expires in 2032 though it has a 10-year option still in the pocket and pays around $3 million a year in rent – putting any likely deal at around a 4.5 per cent yield.
The pub’s 96 gaming machines swallowed $26.22 million in the last financial year, according to data from the Victorian Gambling and Casino Control Commission. There’s plenty being outlaid by punters in the neighbourhood. The City of Whittlesea trails only Brimbank and Casey for spending on gaming machines.
JLL’s Will Connolly and Stuart Taylor, and Cropley Commercial’s Steve Cropley have the listing.
If you don’t like the Bundoora Hotel, Healesville’s Grand Hotel, in the heart of the Yarra Valley, is also for sale. The historic pub at 270 Maroondah Highway in Healesville is expected to fetch more than $3.5 million. Records show it last sold in 2021 for $3.3 million to the Schiavello family.
The hotel is on a 1509 sq m corner parcel of land and includes 16 hotel rooms upstairs and a pretty beer garden downstairs. It returns about $230,000 a year in rent.
Savills’ Matthew George and Tim Grant are running the campaign.
Royal Arcade
Jewels and perfumes dominate the CBD’s Royal Arcade, overseen by time-keepers Gog and Magog.
However, another jewellery shop in the Arcade is for sale. GS Diamonds pay $124,131 a year in rent for the three-storey property in the heart of the arcade and have 6.5 years left on the lease.
The vendor is also a jeweller, the Thomas family, who have been in the business for more than 100 years. They own the 176 sq m shop and others in the arcade.
Thomas the Jeweller once occupied a prominent position at the entrance to the Royal Arcade on the Bourke Street Mall, now occupied by the ANZ bank.
The family tried to sell it for around $30 million in 2017 but the price was too high, even at the market peak.
Cushman & Wakefield’s Jack Cooper, Angus Parnham and Oliver Hay are running the show and quoting around $2.5 million for shop 13.
The last shop to sell in the Royal Arcade was Love It Jewellery which fetched around $1.5 million through Allard Shelton’s Joseph Walton, Tony Nguyen and Patrick Barnes.
Suburban office
There are signs of life in the suburban office market where investors are making a cautious return if conditions are right.
Newscorp’s old Leader Newspapers headquarters at 1 Chapel Street, Blackburn has fetched $30.25 million – about the same price paid by Vantage Property Investments in 2018.
Perth-based Trident Capital is the new owner of the low-rise 6059 sq m building which sits between Whitehorse Road and Blackburn railway station.
Savills’ Jamus Campbell and Nick Peden and CBRE’s Trent Hobart did the deal.
Investors are around but only for assets with limited or no vacancy, Peden said. This building had one vacant floor for which the buyer already had a tenant.
Peden and Campbell also sold Fraser Brown’s 2-4 Roche Street office in Hawthorn for $24.8 million in an off-market deal.
Charlie Buxton’s Cadence Property Group and Align Property Group bought the fully leased 2947 sq m building.
Brown Property Group will remain on the ground floor under a 10-year leaseback deal. Brown had paid $9 million for the 1209 sq m development site in 2017.
Furniture brand
Global furniture brand Natuzzi Italia is moving back to Cremorne, Melbourne’s centre of designer furniture.
Natuzzi has signed a 10-year lease on the 483 sq m ground floor space at Balmain House at 120 Balmain Street – just off the Church Street strip where it once traded.
The new showroom is scheduled to open next March when the 10-storey building, developed by Skylife and Borg and designed by Bates Smart, is finished.
Luxury watch retailer and new Lego distributor, Kennedy Consolidated, has already signed up to 3300 sq m for levels 7, 8 and 9.
The deal was negotiated by Colliers’ Travis Myerscough and Matt Stagg with Teska Carson’s Reece Israel.
Competition for space is fierce among the designer furniture retailers. Earlier this year, Nick Scali bought Coco Republic’s showroom at 500 Church Street for $22 million.
Secondhand store
The Footscray outlet of giant US secondhand store Savers is on the market but it will be no bargain.
The 3790 sq m site, which includes the old Target Arcade on Nicholson Street, is likely to fetch around $14.5 million.
The site is on four titles – 33 Albert Street, 76 Irving Street and 150-168 Nicholson Street – and has four tenants paying $904,253 a year in rent. Savers pays 79 per cent of the total.
The retailer recently renewed a 10-year option taking its lease term out to 2037 and has another option up its sleeve. Dawkins Occhiuto’s Walter Occhiuto and Rachel Clohesy have the listing.
The inner western suburb is just a short train ride from the CBD via the new Metro Tunnel and is surrounded by apartment towers and plenty of development sites big and small.
A local developer is understood to have paid a bargain $2000 a sq m for a 1239 sq m site at 13-15 and 22-28 Ford Street – about 2.5 million – to the mortgagee.
The site came with a permit for two towers offering 78 apartments. The deal was done by Gross Waddell ICR’s Andrew Greenway and Danny Clark with Nguyen Real Estate’s Kevin Nguyen.
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