A well-leased commercial investment property in Hawthorn East has come up for sale with the promise of strong ongoing rental return, as Melbourne’s east consistently demonstrates its strength as a high-performing office market.
The prominent two-storey office building at 785-789 Toorak Road has a net lettable area of 4,006sqm, which is 94 per cent leased to seven high-profile tenants with varying lease expiries.
Colliers International’s Peter Bremner and Rob Joyes, in conjunction with JLL’s Josh Tebb and Marcus Quinn, have been appointed to the expressions-of-interest campaign, anticipating enquiry from local and offshore private investors and syndicates.
“On a fully let basis, the estimated net income would be approximately $1.46million per annum,” Mr Bremner said.
“The current passing rents are well below market levels, which leaves scope to unlock the future rental reversion, with rental growth expected to increase as the inner-eastern market experiences a lack of future office supply.”
Mr Tebb said the site’s versatility, derived from its significant area of 3,042sqm, mixed-use zoning and prime Toorak Road location, metres from the Monash Freeway diamond interchange, placed it well for possible redevelopment.
“The vendor has recently completed upgrade works to both entry points to the building, which will allow the new owner to push rents significantly and cater to strong underlying demand for the inner-eastern office market,” he said.
“The building benefits from a 4.5-star NABERS rating and has secure ground-floor and basement car parking for 123 cars.
“Not only that, the quality accommodation with flexible floor plates can cater to single or multiple tenancies, creating a larger pool of future target tenants.”
Mr Joyes said a lack of future office developments in the inner east would boost rents and decrease incentives in the precinct, resulting in strong effective rental growth.
“Many sites zoned for Commercial 1 and Mixed Use in this area have previously been purchased for residential projects, creating a limited office development pipeline,” he said.
“Several high-end residential developments are currently under construction within close proximity of 785-789 Toorak Road, including East Side Village and Brass House, which is testament to the strong housing demand in the immediate area and future requirements of office space, if Hawthorn is to become a suburban business hub.”