Offices in Vogue on St Kilda Road
Melbourne-based fund manager Vantage Property Investments has bought the 10-level 574 St Kilda Road office tower for $58 million from the Lederman family’s SHL Nominees, with plans to refurbish the building.
Built in 1988 as the Unisys Centre, the 7,742sqm building, opposite Wesley College and on the corner of Moubray Street, is 35% vacant and Vantage is targeting a 6.1% fully leased yield through next year, according to the Financial Review. Tenants in the building include stationary supplier Bic, advertising agency McCann Worldgroup, and geographic information systems company Esri Cartonet.
Vantage and partners KKR had sold 420 St Kilda Road for $98 million in April this year to Hong Kong group Mars Family Holdings, after paying $68 million for the tower in 2017.
After a period of stock withdrawals for residential conversion and redevelopment along St Kilda Road, tenant demand and tight vacancies have spilled over from the Melbourne CBD and commercial refurbishments and office plays are being favoured over apartment projects.
Recently, Singapore private equity firm SC Capital Partners $107 million for the former police complex at 412 St Kilda Road to Malaysian developer UEM Sunrise, which had proposed a 152-apartment development, and Woodlink sold Iloura House at 424 St Kilda Road for more than $70 million. The building will now be refurbished and re-leased after previously being earmarked for a $360 million residential project.
Also recently, Brendan Sullivan bought a mostly vacant St Kilda Road block at 1 Bowen Crescent for just under $18 million, also to refurbish and re-lease.
Scentre Buys Up Around Westfield Doncaster
Retail landlord Scentre and co-owners of the Westfield Doncaster have bought a suburban office building on a 2,000sqm site to shore up their footprint around the shopping centre.
The 3-level building at 651 Doncaster Road sold for $15.15 million, and was previously owned by LaManna family, known for their popular fruit and vegetable business.
Scentre has a 50% share in Westfield Doncaster, and the balance is equally held between are super fund investor ISPT and British fund M&G Real Estate.
Scentre won approval from the State Government earlier this year for the $500 million redevelopment masterplan at Westfield Doncaster, that will include a 14-storey tower above a 2-level podium for retail outlets, and will have an additional 43,000sqm of retail and 18,000sqm of office space.
University of Melbourne Boosts Development Options
The University of Melbourne has bought two office building sites to $46 million from the Red Cross that will add to its future development capabilities around its Parkville campus.
The neighbouring Carlton office buildings, at 163-167 Bouverie Street and 147-155 Pelham Street, are tenanted by Super Benefits Administration and RMIT University on short-term deals until May 2022. They bring more than $800,000pa combined and are on sites zoned Capital City 5, which would allow for commercial, student accommodation and education uses.
Lascorp Buys Charter Hall Supermarket Trio
Retail property investor and developer Lascorp bought three supermarkets across regional Victoria supermarkets for $62.35 million from ASX-listed Charter Hall Retail REIT.
The assets included:
- Coles Bairnsdale, East Gippsland for $18.4 million at a 5.45% yield
- Kyneton Shopping Centre, which includes a freestanding Woolworths supermarket and 4 shops for $22.85 million at a 5.5% yield
- Coles Moe for $21.1 million at a 5.7% yield.
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.