Forza Capital is paying Carlton United Breweries $12 million for a multi-level car park near the banks of the Yarra River, in Abbotsford.
The 3880 square metre holding covering 33 Flockhart Street and 38 Grosvenor Street was offered by the brewer with a leaseback.
CUB pays annual rent of $789,937 for the property, which contains a 470-bay complex, the bulk of which it plans to occupy.
On that basis, the investment is selling at a 6.6 per cent passing yield.
The weighted average lease expiry is 7.5 years.
Forza Capital director Ashley Wain said the asset will seed a new investment vehicle, Forza Grosvenor Street Fund.
Longer term, the site has both residential and commercial redevelopment potential.
“The fund was heavily subscribed and raised $7.3 million of equity from Forza’s client base of high net worth investors in just over 24 hours,” said Mr Wain, added the developer was attracted to the land-rich nature of the offering.
“This will deliver our investors a very attractive cash return whilst still providing future expansion potential”.
Forza Capital was established in 2010 by Mr Wain and Adam Murchie to provide property investments to individuals, families and private client advisory firms.
Forza Capital director Adam Murchie added “the Abbotsford market is undergoing gentrification and growing in appeal from office tenants. The Grosvenor Street asset has the potential to add additional office levels to the existing structure to take advantage of increased demand for city fringe office and this was one of the attributes that attracted us”.
About three kilometres east of the CBD, the site is
opposite parkland and walking distance to Victoria Gardens Shopping Centre.
Flockhart Street is near the eastern boundary of the brewer’s nine-hectare Abbotsford plant.
“Opportunities of this type and scale are becoming increasingly rare within 3km of the Melbourne CBD,” Mr McColl said. “For this reason, this pocket of Abbotsford has received significant investor interest in the last 12 months.”
In 2007, CUB sold Wyllie Group and Charter Hall 10 buildings around the brewery for $41 million.
The portfolio included the curved office at 2-6 Southampton Crescent which was built in 1928 for Kodak, but was until recently occupied by CUB.
This Southampton Crescent office and two vacant warehouses, all acquired as part of the 2007 sell-down, were relisted in 2015 and sold for $20 million to Chinese investor Hengyi.
Coincidentally, 4500 sqm of CUB-occupied space at 2-6 Southampton Crescent has recently been listed for lease via Vinci Carbone.
Numerous industrial sites with residential development
potential have sold around the Yarra River in Abbotsford recently.
Last October, LAS Group and the Herzog Group banked $37.3 million selling 45 and 50 Grosvenor Street to a Chinese investor. This portfolio includes a historic ex-Westons biscuit factory turned office/warehouse investment, which is across the road from 33 Flockhart Street, and an open-air car park, which abuts the Forza multi-level complex.
In February, a consortium of Australian-Chinese investors paid $17.3 million for a warehouse on Industrial 1 zoned land at 30-36 Grosvenor Street. Leased to IKEA, this 4616 sqm block is mooted to make way for an apartment building longer term.
The Zagame family also paid the Australian Education Union $21 million for a mixed-use development site at 112-124 Trenerry Crescent, a site which backs onto the Yarra River and overlooks Dights Falls. This 4735 site includes the c1927 Austral Silk and Cotton Mills warehouse, but is zoned to allow for a residential or hospitality repurpose.
Members of Melbourne’s wealthy Holckner family also sold a property in this street: a low-rise office on a 5927 sqm block at 64-78 Trenerry Crescent traded for more than $40 million.
Vinci Carbone, on behalf of Peregrine Projects, also sold an Abbotsford site: 11-17 South Audley Street traded for more than $10 million. A low-rise building on the site is leased to CUB for seven more months.
Last September, Thorne Harbour Health paid service station owners Avi Silver and Eddie Hirsch more than $10.5 million for a historic former shoe factory at 198-210 Hoddle Street, Abbotsford.
Fifteen months ago, CUB sold a Southbank office occupied as its headquarters to the Victorian government for $95.5 million. This building is set to be reconfigured into a public art space.