Chanel lands trophy store in $75m luxury deal

Luxury retailer Chanel has paid a thumping $75 million to buy the 10-year-old boutique store where it retails $10,000-plus handbags and shoes.

It’s small change for Mousse Investments, the owner of the $30 billion Chanel brand. Mousse’s owners, brothers Alain and Gérard Wertheimer, are worth an estimated $57 billion each, according to Forbes, and their fortune has more than doubled since 2020.

Chanel purchased the Russell Street building for $75 million.Credit: Eamon Gallagher

No wonder. Chanel increases the prices of its coveted handbags twice a year and some Classic Flap Bags have doubled in price in the past five years.

Chanel’s purchase of the corner store on Russell Street and Flinders Lane is a huge vote of confidence in Melbourne’s CBD. Records show an off-market transaction between Mousse Investments and the building’s vendor, theatre impresario and property developer David Marriner, settled in December.

According to agents aware of the arrangements between Mousse and Marriner, its original lease included an option to purchase the six-level building at 42 Russell Street.

“Chanel has exercised its option,” the agent said.

The deal cements the growing importance of the Flinders Lane strip in Melbourne’s luxury retail market. The street where fashion was once manufactured is now one of its premier retail strips, rivalled only by Collins Street.

Last year, Chanel’s luxury rival Christian Dior paid $39 million for the former Ivy nightclub across the street at 145–149 Flinders Lane.

In 2020, Singaporean investor and watch retailer The Hour Glass paid $68 million for the Louis Vuitton building at 139 Collins Street.

The Chanel building belonged to the Church of Scientology for nearly 30 years before the Marriner Group company bought it for $7.4 million in 2009.

It’s on a 346 square metre lot, giving the property a staggering land value of $216,763. The two previous deals were struck at around $130,000 a square metre.

Delica meat

The family which owns Delica Meats is selling a huge St Kilda landholding they have held since 1966, the year of St Kilda Football Club’s sole premiership.

The 9122 square metre parcel of land includes 10 addresses on 12 titles with frontages to Barkly, Carlisle, Greeves and Vale Street – a couple of houses, a block of flats and a handful of commercial buildings, some of which are occupied by the 70-year-old Delica Meats.

Colliers agents Jozef Dickinson, Brett Griffith and Philip Heberling are handling enquiries with Mark Wizel’s Advise Transact representing the vendor.

The extraordinary site is likely to fetch between $70-$90 million depending on the potential planning outcome of any future scheme. Dickinson said there are no height limits on that stretch of Barkly Street.

Self storage

Self-storage giant Kennards has set a new land record in Abbotsford, paying $5.23 million off-market for three warehouses adjoining its existing premises, a historic four-storey shoe factory on the corner of Russell and Langridge streets.

While the headline price is low, it equates to $7346 a square metre, trumping the $6996 a square metre paid for 112-124 Trenerry Crescent 12 months ago.

Harry the Hirer boss Rick Jamieson paid $29.75 million to the Zagame family for the historic riverside factory once owned and occupied by the Australian Education Union.

112 Trenerry Crescent, Abbotsford.

Kennards, which has 101 storage facilities, recently missed out on buying two warehouses on a 2177 square metre parcel of land nearby at 1-3 Bloomburg Street and 2 Greenwood Street.

That property changed hands before Christmas for $9.5 million.

Both deals were done by Stonebridge Property Group agents Max Warren, Dylan Kilner and Chao Zhang.

The Russell street buildings are a handier purchase for Kennards, which bought 1-15 Russell Street, the historic Williams Shoe Factory, for $2.32 million in 2004.

Apartment living has created a booming storage market in the area. Late last year, StorHub paid $14.3 million for 26-42 Alexandra Parade, Clifton Hill, a building the Silver Top taxi-owning Gange family owned twice. It was one of a portfolio of properties bought by the Napthine Government for the aborted East West Link.

And at the Richmond end of Abbotsford, the Sachs family paid $19 million for 2-6 Southampton Street in Abbotsford, which was once owned and occupied by Carlton & United Breweries.

Nearby, investment group Forza Capital has finally sold the former CUB car park at 38 Grosvenor Street, with a local investor paying $14.6 million for the 3880 square metre riverside property.

Jones Real Estate agent Paul Jones handled the off-market deal. Records show Forza paid $12 million for the 470-bay four-level carpark in 2019.

The fund originally listed the carpark last year after the Victorian Civil and Administrative Tribunal rejected its bid to build an office tower on top because it was too big and too close to the Yarra River.

The 478 bay car park at 38 Grosvenor Street, Abbotsford.

Jones said there is “significant private capital” looking to buy in Victoria and expects this “transaction will act as a catalyst for other investors to enter the playing field”.

And indeed, further up the street at 37-41 Grosvenor Street, a Malaysian land banker has paid $5.48 million for three warehouses covering 985 square metres on a 1246 square metre site.

37-41 Grosvenor Street, Abbotsford.

Stonebridge’s agents Warren, Kilner and Zhang also sold that property.

Smorgon clan

An offshore investor has splashed $21 million on the Woolworths supermarket in the western Victorian town of Colac.

The hot deal, reflecting a 6 per cent yield, was completed less than a day after the campaign closed with the buyer, new to retail investment, scoring the property.

Records show the vendor was the Holckner family, an offshoot of the wealthy Smorgon clan, who had owned the property for more than 40 years.

Gross Waddell agents Michael Gross, Glenn Ye, Alex Ham and Danny Clark handled the transaction. They declined to comment on the vendor.

Ye said the property drew “strong interest from offshore and Australian-based Chinese groups who were attracted to the strong lease covenant to Woolworths and the potential value-add”.

The 5366 sq m supermarket at 2-16 Bromfield Street is on a large 11,800 square metre site and returns $1.26 million a year in rent.

The supermarket giant has a long lease on the property with six five-year options remaining from 2028.

On the other side of Colac’s main drag, the Kmart discount shop at 145-167 Murray Street has also sold, with a Melbourne investor-developer paying $5.25 million.

The 4459 square metre shop is on a 7823 square metre site backing on to Dennis Street. A series of three-year options on the building could ensure Kmart’s position until 2036.

Savills agents Rick Silberman and Stephen Bolton handled the sale.

While long leases are usually a lure for investors, this one is understood to be at below market rent so was more of a disincentive.

Records show it last changed hands in 1996 for $550,000 when Sutherlon, a company then controlled by United Petroleum’s Eddie Hirsch and Avi Silver, bought it. They are no longer listed as directors or shareholders of the company which is now owned by Henry Rubin and Gabriel Amira.

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