Grunge icon Prince of Wales for sale at knock-down price
Gloomy economic conditions and the dilapidated state of St Kilda’s main thoroughfare of Fitzroy Street is weighing on the Prince of Wales Hotel, which is back on the market with its price tag cut by up to $15 million.
The once-grungy Prince is for sale with a discounted price tag of $30 million. The four-storey art deco pub, on the corner of Acland Street, hit the market last year with an expected price between $45 million and $50 million, but there were no buyers at that level.
The recently renovated Prince of Wales Hotel in St Kilda.Credit: Luis Ascui
Fitzroy Street’s travails have undermined the hotel’s value, despite a recent multi-million renovation that restored its art deco features.
Back in 2015, the Jackalope Group bought the prized landmark for a bumper $44.5 million from experienced hospitality operators and owners, Lisa and John Van Haandel.
It was earning $2.3 million a year from seven different venues and retailers, chief among them the highly acclaimed restaurant Circa.
By 2017, Circa was gone and the more casual Prince Dining Room took its place. The venue won a Good Food hat last year under chef Daniel Cooper, but he has already left. Instead, Sydney chefs Mitch Orr and Ben Parkinson are now making the menu 20 years after Circa’s debut.
The Ryan family’s Melbourne Pub Group, which also own and operate the Mitchelton and Hubert estates in the Yarra Valley, has a long lease on the hotel which includes a 39-room boutique hotel, the Rain Room venue and Black Star Pastry. It now returns approximately $2.1 million in rent.
The 13,258 square metre hotel is on a 4269 square metre piece of real estate just a short walk from St Kilda Beach.
Fitzroy Street has struggled in the past 10 years, along with the retail end of Acland Street, as high rents and ratty street life put a dark cloud on the strips’ sunny disposition.
The coronavirus pandemic didn’t help, although around the corner the Esplanade is still pulling a young crowd and Italian eatery D.O.C has opened at in Tim Gurner’s Saint Moritz development.
New hotels are proposed behind some of the hoardings on Fitzroy Street and the award-winning Pride Centre is drawing new patrons. Hatted chef Karen Martini is up the street at Saint George and Cafe di Stasio has re-opened with a gallery planned.
It’s not the only property that Jackalope is jettisoning. Also on the market is the splendid Maria George building at 179-181 Flinders Lane where the group had planned to build a new hotel alongside its neighbour.
But last year it sold No.175 to restaurateur Chris Lucas for $23.5 million. The Maria George building is expected to fetch around $15 million.
The Maria George building at 179-181 Flinders Lane.
Cushman & Wakefield agents Oliver Hay, Daniel Wolman and Leon Ma have the listing.
All that jazz
Jazz impresario and flamboyant property developer Albert Dadon has offloaded his vacant 35-storey hotel complex opposite the Flagstaff Gardens for around $70 million.
The serviced apartment hotel, Oaks Melbourne on William Suites - a name which never easily rolled off the tongue - will likely get a new name when the new owner steps in.
Records show the buyer is the locally based Chen family, who operate a couple of hotels in Melbourne.
The deal was negotiated by JLL’s Peter Harper and Nick MacFie, in conjunction with Colliers. KordaMentha Real Estate represented the vendor, Dadon’s property company Ubertas.
Albert Dadon’s Oaks Melbourne on William Suites, opposite Flagstaff Gardens.Credit:
Dadon bought the 350 William Street property from legal firm Holding Redlich in 2005 for $12.8 million. He embarked on a 35-storey residential tower, which included 376 apartments and a 220-room hotel. Dadon’s jazz club, Bird’s Basement, is downstairs.
When it was listed last year, the investment came with a circa $90 million price tag and was touted as the first vacant hotel to hit the market in five years.
The sale price of around $70 million shows how the market has shifted in that time despite hotels holding their own in the current market.
Mirka’s murals
Meanwhile, back in St Kilda, a local private investor has snapped up the Tolarno Hotel at 42 Fitzroy Street, which comes with several Mirka Mora murals, for $6 million.
The Tolarno Hotel at 42 Fitzroy Street, St Kilda.
The 37-room hotel is leased to La Vie Hotels while the restaurant, established by artist Mirka Mora and her art dealer husband Georges in the 1960s, is vacant.
Vendors James Fagan and Bernard Corser bought the property in 1995 for $1.01 million after seeing an advertisement in The Age.
Maintaining the property’s arts history, the hotel rooms upstairs are filled with 165 paintings collected via the Tolarno graduate art prize. Mora’s murals range from the 1950s to her last work in 2007.
The vacant restaurant was most recently occupied by Bergerac. Famed chefs Leon Massoni and Iain Hewitson once cooked there and Grossi Florentino owner Guy Grossi learned to cook in its kitchen in the 1970s.
CBRE’s Scott Callow and Nathan Mufale brokered the deal.
Donut factory
The Mr Donut factory in Mordialloc has been snapped up by ASX-listed Abacus Storage King for $13 million.
The property at 292-306 Lower Dandenong Road had been home to Mr Donut since 2004. The donut-making business started in 1979.
Abacus general manager Nikki Lawson said the Mordialloc property “addresses a network gap we identified in the Melbourne market. It offers attractive exposure for our brand and access to a community not currently serviced by Storage King.”
The 5234 sq m factory was on an 11,760 square metre corner site in a busy area opposite a new Goodman estate and Moorabbin Airport.
While both the business and factory were for sale, no parties were prepared to take on the Mr Donut name and the hoppers and jam injectors were sold separately.
Stonebridge Property Group’s Rorey James, Dylan Kilner and Chao Zhang did the deal, with Link Business Brokers’ Steven Mostafa and Nadia Polzella.
James said bids came from a range of “owner occupiers, storage providers and food manufacturers, along with three bids via our Asia Practice team.”
Tally Ho
An owner-occupier has picked up 12 Lakeside Drive in East Burwood’s Tally Ho Business Park for around $17 million.
The buyer is understood to be an offshore Asian business with local operations in yet another example of owner-occupiers buying vacant buildings which investors have struggled to lease.
The three-level 4509 square metre building was purpose-built for VicRoads in 1996 and owned by the wealthy Myer family until 2018.
Myer Family Investments sold it to Hong Kong-based investor Mars for $25.5 million in 2018, making a spectacular $9.5 million profit.
12 Lakeside Drive, Burwood East, has sold for around $17 million.
Mars has been divesting its Melbourne holdings. Last year it sold 424-426 St Kilda Road to developer Tim Gurner for around $80 million, making a $10 million profit on the investment. It then listed 420 St Kilda Road for about $85 million, after paying $98 million in 2019.
Cushman & Wakefield agents Ma, Hay and Wolman did the deal.
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.