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Pellicano's sell family asset for $9.75m

Property Markets / Transactions

Australia / Melbourne

Jul 09 2018

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A Bentleigh commercial property, which had belonged to members of the Pellicano family for 30 years, has sold to a local Melbourne developer for $9.75 million.

The 277-279 Centre Road property was sold with a permit for 52 apartments and according to CBRE National Director Investments Mark Wizel, who brokered the deal with Julian White and Nathan Mufale, attracted a strong field of local, interstate and Asian purchasers.

``The property attracted a great deal of interest, based on the location and its development ready status, ultimately selling to a local developer with perhaps the very real advantage of local knowledge.

``That local market insight and intuition can prove to be a decisive factor in a tight contest and may well be behind a recent trend to local developers outbidding their Asian-based rivals, especially in the sub $20 million market in good suburbs,’’ Mr Wizel said.

Located within the coveted McKinnon Secondary College zone, the property comprises a 1,564 square metre, Commercial 1 zoned allotment, with a 1276 square metre, double storey commercial building, a street frontage of over 33 metres and rear lane access to 36 car spaces.

It was sold 90 per cent leased to nine tenants at a passing income of $267,000 per annum.

Mr White said the sharp yield of 2.7 per cent reflected the enormous development upside in unlocking the best-use potential of the property.

``With the development permit in place the property is capable of delivering optimum returns in a location which continues to see exponential growth on the back of Melbourne’s nation leading population surge,’’ Mr White said.

The permit allows for a RotheLowman designed, mix-used, seven level, development with 52 apartments and two ground floor retail spaces.

This sale is the most recent of a number of suburban deals to have occurred in the last 12 months that have been land rich development assets, but with a current strong level of income and improvements including:

 Address

Price Land Rate Yield  Buyer
277-279 Centre Road, Bentleigh $9,750,000 $6,234/sqm 2.7% Local
Beller House, Balaclava Confidential $8,108/sqm 3.9% Local
372-376 Glen Huntly Road, Elsternwick $9,200,000 $15,889/sqm 3.7% Local
Burgundy Plaza, Heidelberg $14,390,000 $5,710/sqm 2.2% Local
143-151 Bridge Road, Richmond  

 $14,110,000

$19,597/sqm 3.2% Chinese
Coles Clayton $17,115,000 $5,945/sqm 2.6% Local

Mr Wizel said the popularity of this asset class was a clear sign of confidence in Melbourne’s real estate market, with local developers aggressively competing to acquire large land parcels in quality locations. 

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