This article is from the Australian Property Journal archive
A THREE level complex housing Melbourne’s first Virgin Active health and fitness club has been listed for sale in a move tipped to generate one of the city’s largest ever strata sales.
CB Richard Ellis has been appointed to market the 138 Bourke Street space, which offers a new 15-year lease with options to Virgin Active – one of the world’s leading fitness chains. Launched last year, the club is the second in Australia for flamboyant UK entrepreneur Richard Branson with further openings tipped this year.
CBRE’s Mark Wizel and Sebastian Drapac will steer the Expressions of Interest campaign closing Thursday August 12th at 4pm. They have tipped the property will fetch around $18 million.
Wizel said the strength of the Virgin Active tenancy covenant will attract significant buyer interest. Virgin occupies the space under a 15 year lease with two, five year options. The current net annual income is circa $1,542,000.
“Rarely do investors have the opportunity to purchase a property with the style of tenancy covenant that the Virgin brand offers,” he added.
Melbourne investment group Drapac redeveloped the 4,816 sqm former Hoyts complex after forming a partnership with Sustainability Victoria and the Department of Innovation, Industry and Regional Development who assisted in financing a range of sustainability initiatives.
“We aimed to redevelop the once iconic Hoyts Cinema into a modern Melbourne CBD icon. We feel we have succeeded with a unique Williams Boag Architects designed building with ESD features and a multinational tenant who has provided a new benchmark for gyms and lifestyle in Australia,” Drapac property manager Anthony Osborne said.
“The property also has extraordinary flexibility and value-add opportunities in the long term future. The building was designed to allow conversion to a mix of prime Bourke Street retail and large ‘Manhattan Style’ open plan offices. Alternatively, the whole property could accommodate a multi level retail conversion,” he said.
Australian Property Journal
