Morry Schwartz makes Queen Street re-entry
Developer-publisher Morry Schwartz has made his move back into the property market, striking a $16 million bargain for a B-grade office building in Melbourne’s CBD.
The12-storey building 99 Queen Street fetched $30 million in 2023 amid some fanfare about the improving CBD property market but the deal collapsed.
Records show Chinese investor Ming Jiang has removed the caveat on the former Bank of Singapore House, but legal action in understood to be brewing over the aborted purchase.
Schwartz told Capital Gain 12 months ago he was keen to get back into property, but the prices were still too high. Well, they’re not any more.
The 12-storey building at 99 Queen Street sold for around $16 million.
“It will remain an office building. There’s a huge development around the corner on Bourke Street being built by Cbus that will have 5500 employees so the location is perfect,” Schwartz said.
The publisher and owner of Schwartz Media, which publishes The Saturday Paper, The Monthly and Black Inc Books, stepped down as chairman last December. But his property career dates back decades and includes a string of successful commercial and residential developments.
After last year’s sale collapsed, the vendor, the Scaunich Group, appointed Cushman & Wakefield agents Daniel Wolman, Oliver Hay, Leon Ma to sell the property. They declined to discuss the deal, which came in well below the optimistic $20 million-plus quote.
The 4153-square-metre tower is on a 508-square-metre block between Collins and Bourke streets and last changed hands in 2006 for $15.05 million.
Around the corner, a six-storey office at 410 Lonsdale Street is back on the market after campaigns in the past few years yielded no deal.
Cushman & Wakefield’s Wolman, Ma, Anthony Kirwan and George Davies are handling the sale and expecting between $8 million and $9 million.
Retail
Elsewhere in the CBD, on the Bourke Hill, values have been increasing. A two-storey restaurant at 171 Bourke Street, leased to Thai Tide, is going to auction on September 19.
Colliers agents Matt Stagg, Nick Garoni, Travis Keenan, and Yvonne Zhou are running the auction and expect more than $5 million.
171 Bourke Street, Melbourne.
That’s the price range achieved recently for 147 Bourke Street, which sold for $5.5 million to a European investor.
That building, leased to Japanese restaurant Dohtonbori, was bought in July 2020 for $3.85 million. Vinci Carbone agents Frank Vinci and Joseph Carbone handled the sale and also acted for the vendor of 45-49 Bourke Street, which sold to Patricia Ilhan for $16.2 million earlier this year.
Around the corner, at 136 Little Collins Street, a two-storey boutique is going to auction as part of CBRE’s National Auction Series on August 21. The 186-square-metre shop is next door to Golden Age’s new strata tower at 130 Little Collins Street.
CBRE’s Alex Brierley, Nathan Mufale and JJ Heng are handling inquiries. It sold just last year for $3.15 million and is expected to fetch a similar amount.
Hawthorn office
Auto electrical business NHP Electrical Engineering Products has a new headquarters, buying 16-18 Cato Street in East Hawthorn for about $25 million.
After failing to sell the property for more than $30 million last year, Anthony Wilson’s Terraplex had dropped the asking price to $25 million.
The rumour mill told Capital Gain the final price was a bit more than that. There were six bidders for the property in a campaign run by JLL’s Tim Carr, Josh Rutman, Mark Stafford and Piper Dedrick with Dawkins Occhiuto agents Andrew Dawkins and Walter Occhiuto.
16-18 Cato Street, East Hawthorn.
Sworn to secrecy, none of the agents confirmed the price. A caveat over the title revealed that NHP is the buyer. The business established by the late Nigel Peck in 1968, is shifting its headquarters from 43-67 River Street, Richmond.
It has been in Richmond for decades, with records showing it bought 43 River Street for $340,000 in 1986.
Terraplex paid $24.7 million for the 5295-square-metre three-storey Hawthorn office in 2016 and then splashed out another $5 million on a refurbishment.
Bunnings moved out two years ago leaving the top two floors empty. International flooring group Gerflor occupies the ground floor.
Cashed-up owner-occupiers have been the biggest players in the suburban office market in the past 18 months, pouncing on vacant or semi-vacant properties that aren’t delivering for investors.
Box Hill
Another suburban office hitting the market is 41-43 Carrington Road in Box Hill, carrying a quote price of around $40 million.
It’s a big price which is based more on its future as a development site than its otherwise attractive health tenancies.
The four-storey 3961-square-metre building is fully leased to Eastern Health and healthAbility and is on a large 2639-square-metre parcel of land with a second frontage to Cambridge Street. It’s opposite the southern face of Vicinity’s Box Hill Central – earmarked for controversial apartment towers – and Box Hill railway station. The proposed Suburban Rail Loop station is also close at hand.
Collier agents Matt Stagg, who is running the campaign with Ben Baines, Jozef Dickinson and Yvonne Zhou said the tenants’ leases expire in 2028.
They provide “excellent holding income until 2028 when vacant possession of the whole building becomes available, enabling redevelopment of the whole site”.
The site is surrounded by Golden Age’s Sky One 36-level tower and Sky Square, a 425-unit project bought out by build-to-rent operator Local for $360 million.
41-43 Carrington Street, Box Hill, opposite Box Hill Central.
Auctions
The new financial year has produced some solid auction results, in both blue chip and beleaguered retail strips.
A single-level 261-square-metre shop at 626 Burke Road sold for $5.081 million last week, nearly $1 million over its reserve, with bidding from five parties. The deal reflected a tight 3.6 per cent yield.
The auction of the 261-square-metre shop was handled by Fitzroys’ Chris James and Ben Liu. It’s leased by Frankie4 and Lucky Well Tattslotto and backs onto Market Square.
In St Kilda, four bidders competed for 133 Acland Street, which sold to a local investor for $4.4 million – $300,000 over its reserve – on a 4.9 per cent yield.
133 Acland Street, St Kilda.
The Commonwealth Bank has leased the 233-square-metre property for more than 50 years and has 3.5 years to run, with options. Fitzroys’ Mark Talbot and David Bourke handled the auction.
The next big test for the market is 48 Church Street, Brighton which Fitzroys’ agents Mark Talbot and Tom Fisher are auctioning on September 6.
It’s the first time the 155-square-metre shop has come up for sale in nearly 50 years, and it’s expected to fetch more than $4 million. It has a fresh lease to Bed Bath N’ Table, which has traded in the spot for 20 years.
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