This article is from the Australian Property Journal archive
MOLONGLO Group has found a buyer for a Canberra office building for around $71 million, and is now looking to offload the Brunswick Market site in Melbourne just two years after buying it as a development play.
Molonglo is focusing on the 14-hectare Dairy Road neighbourhood it is developing in Canberra’s East Lake over the next 10 to 15 years.
City of Brisbane Investment Corporation has bought the eight-storey 33 Allara Street building, which was built in 1989 as part of a precinct that includes the Canberra Convention Centre, Canberra Casino and Glebe Park.
Molonglo acquired the property in 2015 and spent $24.4 million on refurbishments. The A-grade building has 9,736 sqm of net lettable area leased to government, corporate and hospitality tenants, including the Murray Darling Basin Authority. Fully leased net annual income is nearly $4.36 million.
It is on 3,725 sqm of land with approval for an additional 1,016 sqm designed by Fender Katsalidis, and has a 4.5-star NABERS energy rating and parking for 117 cars.
A circa $75 million deal with Cromwell Property Group for the asset fell through last year.
Three years ago, Molonglo sold off the Nishi building it developed in Canberra for $256 million to Centuria Office REIT.
Market back on the market
In Melbourne, Molonglo has put the Brunswick Market site that it bought two years ago for $17 million up for sale.
The northern Melbourne Market dates back to the 1950s, and continues to operate as a fresh meat and vegetable market, with a range of smaller retailers including cobblers, hairdressers, a two-dollar shop, second-hand store and takeaway food stores. Interest is expected to come from residential and mixed-use developers in the 3,059 sqm site, with build-to-rent groups are tipped to be prominent. Brunswick has recently been made home to projects in the sector by Mirvac and Milieu, US group Hines, and Assemble.
JLL’s Jesse Radisich, Josh Rutman, Nick Peden, David Hill and MingXuan Li are handling the expressions of interest campaign.
Known as Market Square, the site has prominent frontage to the famous Sydney Road retail strip and is positioned in active development tract between Sydney Road and Breese Street, and just 100 metres from Anstey train station and tram routes.
“There continues to be quite a limited supply of major city-fringe landholdings that offer potential for significant development scale, so this opportunity will provide a strong indication as to the appetite for major sites from both build-to-rent groups but also major locally-based and offshore traditional apartment developers,” Radisich said.
Only six sites over 3,000 sqm have sold in Brunswick over the past 24 months.
About one-third of Brunswick residents are aged between 20 and 34 years, and 54% of the Brunswick workforce are classified as managers/professionals, according to Radisich “providing a compelling demographic story for developers to capitalise on”. Median house prices have risen 92% over the past nine years, pushing home buyer and renter interest towards more attainable apartment product.
Peden said that developers are continuing to appreciate the value proposition of Brunswick in contrast to immediate city-fringe suburbs such as Fitzroy and Collingwood. JLL has recently transacted two sites in Fitzroy for about $12,000 per sqm, and developers can buy in Brunswick for approximately half that rate.
Expressions of interest for 655-661 Sydney Road and 50-52 Breese Street close 20th April.
