Chemist Warehouse founders buy corner block on ritzy Chapel Street

The NAB building at 600 Chapel Street has sold

A consortium including Chemist Warehouse’s two billionaire founders, Jack Gance and Mario Verrocchi, has swooped on a high-profile National Australia Bank branch in Melbourne’s South Yarra for about $15m.

The consortium has snapped up 600 Chapel St, on the corner of Toorak Rd, giving it ownership of one of the country’s prime retail corners, at the epicentre of Melbourne’s affluent and high-density, mixed-use catchments.

The double-storey property was sold by developer Bill McNee, who had bought the site for about $16m in 2022.

Mr McNee sold as he focuses on larger projects, but his move gives Mr Gance and Mr Verrocchi an opportunity to put in a Chemist Warehouse once the bank’s lease expires. The site boasts 38 metres of premium frontage, making it an attractive location.

The existing lease to the bank provides rental income with a favourable CPI plus 1.5 per cent annual rental increases. The bank has occupied the building since 1951 and its lease runs to 2027, with two three-year options.

The property traded at a building rate of $28,248 per sqm and a land rate of $40,214 per sqm. The purchase showed a crisp yield of 2.97 per cent.

The Chemist Warehouse pair are active property buyers and paid almost $10m for three shops in Church St, Brighton, in Melbourne’s Bayside area, earlier this year. The shops at 23-27 Church St were bought on a net passing yield of about 3.6 per cent and can also be redeveloped. The billionaires were expected to hold this property as an investment.

They have been buying other sites that could suit Chemist Warehouse outlets, including another former NAB branch in Richmond and shops in High St, Armadale.

Cushman & Wakefield’s Daniel Wolman, Oliver Hay and Leon Ma handled the sale.

The real estate agency said the off-market deal showed investors remained active despite current debt conditions, adding that premium opportunities were in demand.