This article is from the Australian Property Journal archive
LOW key property player Phileo Australia has quietly snapped up one of the oldest office buildings on St Kilda Rd from BlackRock Property Trust for approximately $29.5 million.
Located at 615 St Kilda Rd, the Tatts Group property was sold last month by agents Jones Lang LaSalle’s Robert Anderson and James Kaufman and Colliers International’s Nick Rathgeber and Leigh Melbourne.
According to industry sources, Phileo Australia has quietly bought the property from BlackRock for $29.5 million, a price which exceeded BlackRock’s initial expectations.
BlackRock put the office complex on the market last year after the sole tenant, Tatts Group, decided to relocate its corporate headquarters to Brisbane, abandoning Victoria after calling the state home since 1954. Tatts had been at 615 St Kilda Rd there since 1997 and will vacate in August.
BlackRock had pulled the property from the market after failing to receive offers of at least $24 million.
However BlackRock turned the loss of Tatts Group into a win, securing the Cancer Council Victoria to the 8,608.8 sqm building and relisted the property with JLL and Colliers. Constructed in 1988, the property is one of the oldest office buildings on St Kilda Rd and requires approximately $6 million in refurbishments.
The Cancer Council Victoria signed on a 10-year lease at a net income of $2,827,726 pa.
Property Review contacted Phileo managing director Rudy Koh for comment.
Phileo has been steadily beefing up its property portfolio over the years. Its previous major acquisition was of 303 Collins St in Melbourne’s CBD from Charter Hall for $56 million, which has been valued at $73.5 million in 2012 annual report.
Earlier this year Phileo announced it has decided to hold onto the flagship investment following a review.
Phileo mulled over offloading the asset after experiencing high vacancy rates following the departure of its major tenant, IOOF, which had occupied 9 floors in the 30-level building.
The acquisition of 615 St Kilda Rd will beef up Phileo’s revenue significantly. In FY2012, Phileo derived most of its annual revenue of $4,656,000 from the rental income generated by 303 Collins St.
Property Review
