Huge ex-Masters store earned $20m rent over 10 years. It was empty and unused

An abandoned ex-Masters store in Sunbury, on which HomeCo has shelled out more than $20 million in rent over the past 10 years, is finally for sale, with a price tag of more than $40 million.

The move should make locals happy. They have proposed turning the empty shed into a much-needed sporting and entertainment facility for the outer north-western suburb in Melbourne.

It was built in 2014 for Woolworths’ over-ambitious Masters Home Improvement hardware chain, which was designed to snatch market share from rival Coles’ Bunnings behemoth. But the hardware and homewares business failed to hit it off with shoppers and collapsed in 2016.

The empty Masters at 3 Deveny Road, Sunbury.

Investment banker David Di Pilla created HomeCo out of the ashes of the Masters portfolio, paying $725 million for the business and most of its well-located sheds. Di Pilla has turned that investment into a $10 billion-plus empire with two listed funds and others in the offing.

This week, HomeCo announced a $300 million equity raising to fund the $1.93 billion acquisition of Sydney data centre owner Global Switch Australia.

The 13,645 sq m building in Sunbury was built by Michael Ferraro’s National Property Group. Records show it was acquired by a company he owns, Mictra, for $11.98 million in 2013.

HomeCo repurposed many of the old Masters stores and turned them into Large Format Retail shopping centres. Doing so requires permission from the landlord and the details of what went on between the two parties over the Sunbury site has remained confidential. The property is in an Industrial 3 zone, which rules out any regular retail development.

Still keen on the growing neighbourhood, HomeCo paid $30.5 million in 2020 for the shopping centre across the street – HomeCo Rosenthal – while the Masters shed remained empty.

Stonebridge’s Justin Dowers and Kevin Tong have been appointed to sell the property, which is on a 3.63-hectare site at 3 Deveny Road with extensive frontage to Vineyard Road.

Dowers said the opportunity was “exceptionally rare”.

“Almost every ex-Masters in the country is owned by HMC Capital, leaving just a handful privately owned,” he said.

“An incoming purchaser will benefit from a 20-year net lease with a strong covenant (10 years remaining) plus future potential to reconfigure the property into a large format centre.”

With more than another $20 million of income remaining on the shed, it’s obviously the optimal time to sell. HomeCo declined to comment and Ferraro was not available.

Treaty deal

Flight Centre founder Geoff Harris has sold a Collingwood office for $6.8 million in an off-market deal.

Records show the buyer of 146-156 Wellington Street is Treaty Authority, an entity set up to be an “independent umpire” in any treaty-related disputes between First Nations groups and the government, or between different traditional owner groups.

145-156 Wellington Street, Collingwood, before it was painted grey.

The two-storey converted warehouse has been occupied by the Reach Foundation since 2001. The youth not-for-profit organisation, which has since moved to East Melbourne, was founded by the late Jim Stynes in 1994.

The 1135 sq m building is on a 705 sq m site near the Gipps Street corner. Colliers agent Ben Baines, Alex Browne and Eddie Foulkes did the deal with Heath Bedford from HRB & Co acting as the vendor’s transaction adviser.

Browne said: “The property was sold off-market even before it had time to go public. The sale price reflects a building rate of $5025 a sq m and a land rate of almost $10,000 a sq m, marking one of the strongest results in Melbourne’s city fringe this year for Commercial 2 zoned assets.”

Epic auction

Four bidders lobbed more than 900 bids at an epic two-hour auction battle on Armadale’s blue-chip High Street shopping strip on Wednesday.

About 100 people turned up for the midday auction at 1047-1051 High Street, which eventually sold for $11,405,000.

The street, packed to the gills with frocks, bridal gowns, cafes and homewares, has a vacancy rate of just 2.3 per cent, according to Fitzroys retail vacancy report, Walk the Strip, with rents commanding as much as $2000 a square metre.

It was declared on the market at $8.6 million several minutes after the strong opening bid of $7.7 million. It had been originally quoted at more than $8 million.

The auction at 1049-1051 High Street, Armadale.

A private investor won the day, refusing to back down against trenchant bidding from a rival party, as a series of $1000, $2000 and $3000 bids tested the patience of onlookers and auctioneer Matt Nichols.

The double-storey shop and office, on the corner of Moorhouse Street, had been in the same family for more than 50 years. Its six tenants return more than $353,000 a year, which gives the transaction a sharp 3.09 per cent yield.

Nichols Crowder agents Nichols and Julian Vautin handled the auction, which had attracted 80 inquiries.

Some potential spectators didn’t get to the 2.30pm auction at nearby Hawksburn Village, where one half of the Minimax homewares shop was going under the hammer.

1049-1051 High Street, Armadale.

No matter. It was a washout. Three parties made a handful of offers before 581-583 Malvern Road was passed in on a vendor bid of $6.8 million. The last bid from a potential buyer was $6.55 million.

Cushman & Wakefield’s George Davies, Raphael Favas, Jeff Ha and Leon Ma were the agents.

But there was spirited bidding for the Specsavers and Woodfrog Bakery shop at 570-572 Burke Road, Camberwell, which sold for $4.88 million.

Records show the vendor of the double-storey shop was Charlton Estates, a company that was owned by the late 5th Viscount Gough, Shane Gough, who died last year.

Charlton Estates had bought the shop in 1995 for $1.26 million. The Viscount had no heirs, so the recipients of the bountiful windfall are hidden behind a trust company.

Chris James, David Bourke and Ben Liu of Fitzroys handled the auction.

Fitzroy neighbours

The Bendigo Bank has called time on mortgages to two of the properties owned by the late Frank Cassar, Fitzroy’s notorious slum landlord.

An old pub and gym at 385-393 Fitzroy Street and a two-storey building at No.379 are for sale through expressions of interest handled by Sutherland Farrelly’s Grant Sutherland and Nelson Alexander’s Luke Chisholm.

The first property, which is partly leased for five years, is expected to fetch more than $2.8 million, while its neighbour is expected to sell for more than $1.2 million. It is leased until November 2026.

385-393 Fitzroy Street, Fitzroy.

The Cassar family owns seven properties between Argyle and Kerr streets along the western side of Fitzroy Street, totalling nearly 2000 sq m of land.

CBRE had a mandate to sell the portfolio in April, and it is understood they fielded interest and offers for the properties. But the scale of their history, including unpaid taxes, undermined any potential transactions.

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