Melbourne’s inner east continues to draw office investors:
A three-level Kew building is the latest asset to change hands in Melbourne’s surging suburban office market.
Paul Burns of Fitzroys, in conjunction with Anthony Kelly of Kelly & Kelly, negotiated the $19 million off-market transaction of 79-83 High Street.
On a 3,760 sqm site positioned just metres from Kew Junction, the 3,361 sqm building was constructed in 1993 and subdivided into 19 strata lots, with all sold in one line. It also has 112 undercover parking spaces.
Zoned Commercial 1, the property is positioned within the Kew Junction Major Activity Centre and traded with a fully leased net income of around $1.1 million per annum. The property is currently 90% occupied with rent generated from 13 tenants across a range of industries. The new owner, a local investor, has proposed a refurbishment of the existing building and common areas, and potentially the addition of extra floor space.
Suburban office market transactions across Melbourne again cracked the $1 billion mark in 2018. Paul Burns said Melbourne’s inner eastern and CBD fringe markets continue to attract the attention of local and offshore investors alike, as vacancy levels tighten and rents increase.
“Melbourne’s inner east office market has been one of the strongest performers, as businesses look to capture a growing generation of workers who desire to live and work across the inner suburbs,” he said.
Some 16,000 new dwellings are expected to be built in the surrounding suburbs by 2041, spurred by Melbourne’s nation-leading population growth.
The building’s highly accessible location and proximity to retail, lifestyle and hospitality offerings were also a drawcard, and the building is just metres from busy Kew Junction and close to major freeways, multiple tram, bus and train routes, as well as the popular Glenferrie Road, Hawthorn retail and hospitality precinct.
Domain set to shack up in Cremorne:
Domain is in talks with Bayley Stuart to take 2,000sqm within the Cremorne office development on the former Nuttelex factory site at 600 Church Street, according to The Age.
The online real estate company would add to the city fringe pocket’s reputation as a tech-oriented hub, with Seek, REA Group, Carsales and MYOB already among its tenants.
Far East acquires historic Bourke Street site:
Hong Kong-listed developer Far East Consortium has paid around $90 million for the Eliza Tinsley building site at 640 Bourke Street in Melbourne’s CBD.
The developer is expected to go ahead with existing approvals for a 68-level apartment tower with 813 units on the 2,735sqm property, which was one of three listed a year ago – each with residential project permits – by developer Besgate.
Those included the 781sqm site at 140 King Street, which Harry Triguboff’s Meriton has just acquired for $29 million to develop its first Melbourne offering, a Meriton Suites apartment hotel.
Last year, student accommodation provider Scape bought the third site, of 1,600sqm at 558-566 Swanston Street, for $31.5 million
The three-level red brick Eliza Tinsley building was constructed at the beginning of the 20th century for the British-founded iron, chain and hardware merchants, and was also occupied by Lloyd Bros and leather merchants James Maginnis. More recently, it was owned by Australia Post which used it for storage. Besgate acquired the three sites in 2014.
The façade of 640 Bourke Street would be retained under the current development plans.
Also in the city, Boston-based AEW Capital Management has just purchased the 22-level office tower at 31 Queen Street for $200 million from Challenger, at a yield of circa 5%.
Office vacancies in Melbourne’s CBD reportedly reached 3.7% over the quarter of this year, its lowest level since 1989.
Disclosure: The weekly Fitzroys Property Wrap is for information only on transactions in the Melbourne property market. Fitzroys provides this information as a public service. We are not purporting that all sales and leases within this report were transacted by Fitzroys. Terms/Privacy © Copyright 2019 Fitzroys.