Fivex Commercial Property buys Carlow House

Fivex Commercial Property has bought a landmark historic building in Melbourne’s CBD.

The building as 34-36 Elizabeth Street is believed to have changed hands on a very tight yield of about 5 percent. According to title documents the deal to buy the heritage listed 10-storey building was sealed last month. The vendor was a private company.

Carlow House includes a mixture of retail, above and below street level, and office space with a total area of about 3700 square metres. Tenants include the Crazy Horse adult theatrette and trendy Jewellers, artist, web designers, publishers and architects.

Leading names already resident in the building include Tolarno Galleries, design and typography company Letterbox and publisher Black Inc.

It is this side of the buildings tenancy that Fivex Commercial Property, which is controlled by the Berger Family hopes to leverage in its vision for the 70 year old property .

“She’s a beautiful old lady this building,” said Fivex Commercial Property director Joshua Berger. “She doesn’t need too much cosmetics to get her up to original beauty.”

Mr Berger said the company’s ambition was to turn the building into an “art deco gem” using shopping over a number of levels as a drawcard.

“The potential in the building is in the retail… it has the potential to move into the future as a vertical gallery, “he said.

The company has awaiting planning approval for refurbishment works which would include a glass and brass awning, new foyers and restoring the building’s art deco tiling, he said

The off-market deal is believed by Savills agent Mathew Kent who was also not able to be contacted yesterday. Fivex Commercial Property already owns a large adjoining property known as Riverview on the corner of Elizabeth and Flinders streets. That 17-level building was bought by the group in 2002 and has since been partially refurbished.

Mr Berger said there was no development angle to acquiring the neighbouring properties and the latest purchase was partly driven by a perception that Melbourne was undervalued.

“None of the building is replaceable at anywhere near the money they are going in Melbourne,” he said. “It is cold case of buying umbrellas in the summer time.”

It is believed that Fivex Commercial Property also passed up an opportunity to buy another adjoining property at 28-32 Elizabeth Street.

Local agents said the deal to buy 36 Elizabeth Street provided another important pointer to the health of local commercial market.

One of the only other similar sized transactions this year was the recent purchase of 405 Bourke Street by a joint venture of Japanese fund manager KK da Vinci Advisors and multiplex Developments.
The Australian Financial Review

22 April, 2008

By Mathew Dunckley