Podco Clarendon Street  Co-Investment Fund

Clarendon Street, South Melbourne

Taking an entire block of prime South Melbourne Real Estate,  328-362 Clarendon Street, 49 & 55-69 Emerald Hill Place and 244-246 Park Street, were acquired in August 2015 for $27.5 million.


The property

Features at the time of purchase included:

  • Site area of approximately 2,761 square metres.

  • A row of 15 terraces centrally located in the Clarendon Street Shopping Precinct. Comprising of 27 individual tenancies (15 retail shops, 2 office tenancies and 10 residential tenancies).
  • Island site 100% leased to diverse tenants that include 15 retail, 2 office and 10 residential premises.

  • Four street frontages on Clarendon Street, Park Street, Emerald Hill Place and Bank Street.

The investment

The original investment strategy highlighted the need to:

  • Remix tenancy blend.

  • Seek rent reviews at higher market levels when negotiating lease extensions or at expiry stage.

  • Undertake planning approval for sub-division of the shops and residences into separate titles to add value and re-sale flexibility.

  • Embark on an exit strategy selling down allocated shops, offices and residences once re-leasing stage complete. Specifically attracting retail investors where there is significant investor demand.

Investment Returns$
Purchase Price (12 lots) $26.25 M
Purchase Price (6 lots sold)$9.10 M
Gross Realisation (6 lots sold)$16.88 M
Value of Remaining Lots (6 Lots)$20.35 M
Est Project Realisation (12 Lots)$37.20 M
Equity Raised$16.10 M
Equity Returned$8.75 M

Achievements and performance to date

Currently seven of the terraced commercial properties have been sold since the subdivision was approved. The gross sales proceeds on these properties total $16.875 million – a gain of 86% above their original cost.