[+] Iconic Drive-In Theatre Gives In to Shed Shortage

Australia’s biggest drive-in theatre has gone on sale 66 years after it opened with the US cold war film noir Assignment—Paris starring Dana Andrews. The Associated Press said at the time “as a screen adventure it is middling good … but too many questions are left unanswered.” Victorians didn’t care. Television was still six months away and hundreds of cars queued for the 650 spaces in front of the single wooden screen of the Dandenong Panoramic Drive-in Theatre on that May evening. Today, the Lunar Dandenong has four giant screens, huge 6500-watt xenon arc lamps and Barco DP2K 32B projectors—among the world’s biggest cinema projectors. But it’s the 5.92ha that the complex sits upon, the commercial-2 zoning, the 277m frontage and its access to Dandenong Bypass, Princes Highway, Monash Freeway and Eastlink that is attracting all the interest. The movie-lovers dilemma is that the Lunar Dandenong drive-in is on prime industrial land at a time when Australia’s industrial and logistics vacancy rate is at a world-low of 0.8 per cent . GO Commercial Industrial director Andrew O’Connell is tipping the site, about 35km south-east of Melbourne, could go for $45 million. ▲ The site of the Lunar Drive-In Dandenong could fetch $45 million. “We been on the market for just over a week and we’ve had well over 50 inquiries,” O’Connell said. “We’ve had a number of owner-occupiers, not necessarily drive-in owner-occupiers, but people who are looking for land to run their businesses from.” O’Connell said there had been big interest from the industrial and commercial real estate investment trusts (REITs), as well as institutional and family money. David Kilderry, who with brother Matthew first leased the site around 2002 and then bought it in 2016, concedes it is unlikely the site will be sold to another operator. He blames sky-rocketing land taxes. “It’s difficult to run a business on land this size with the costs that go with it,” Kilderry said. “It’s not the lack of people,” he said. “We’ve just come off our busiest summer ever. Our admissions are still up between 400,000 and 450,000 per year. ▲ The Lunar Drive-In snack bar. “But our land tax this year is $410,000 and within two years, the way it’s started to zoom up, it’ll be over $700,000,” he said. There are 12 drive-in theatres still operating in Australia. Four have closed in the past 12 months. Most recently, the Mainline Drive-In in Gepps Cross, north of Adelaide, was sold for $11.5 million in December last year. Hamish Crouch of Cushman and Wakefield, who sold the Gepps Cross property off-market, said the 4.2-ha site was bought by prominent South Australian developer Commercial and General. It, too, is prime industrial land. “It is subsequently being offered to the market as a pre-leasing opportunity for commercial and industrial occupiers,” Crouch said. “The gateway site is 9km north of the Adelaide CBD and offers unmatched connectivity for potential occupiers with access via Adelaide’s major north-south and east-west connectors.” The drive-in theatre community is a close-knit one, and Kilderry said soaring property taxes had also prompted the sale of the Wallace Cinema Company’s Gepps Cross site. ▲ The Mainline Drive-In in Gepps Cross, Adelaide. “That was their last of many and it’s on right on Main North Road, a key triangular corner location in Adelaide, and their business has been steady for years,” he said. There’s no single reason drive-in theatres, which once numbered 330 in Australia, have fallen from favour. The advent of colour television in the 1970s didn’t help, nor did the rise of the video cassette recorder in the 1980s. But most recently, their land size and proximity to town centres and main transport arteries has had owners looking at other, more profitable uses. The Lunar Dandenong, for example, has six big warehouses next door. “Of the 23 drive-ins that Melbourne had, almost all of them except probably two or three, were on the outskirts when they were built in the 1950s and 1960s,” Kilderry says. “And you know if our drive-in was five suburbs further out, there wouldn’t be this pressure on the business. Our margins are still pretty good, but we see them getting tighter rather than better.” This week, the Lunar Dandenong, will show movies including DC League of Superpets , Black Adam , The Woman King , and Barbarian on each of its four screens. Walk, don’t run. Because it’s not clear how much longer Melbourne’s biggest and longest-running drive-in will remain open. Expressions of interest for the drive-in site close November 23. You are currently experiencing The Urban Developer Plus (TUD+), our premium membership for property professionals. Click here to learn more.

Industrial
Ralph Nicholson
Fri 04 Nov 22

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