This article is from the Australian Property Journal archive
A 12-level commercial office building at 406 Collins St in Melbourne’s CBD has been snapped by a local investor for $23.1 million following a hotly contested campaign.
Savills directors Clinton Baxter and Nick Peden handled the off-market transaction and said despite strong showing from foreign buyers, it was acquired by a local investor.
The building was sold at a passing yield of 4.43% with the purchaser having the opportunity to significantly increase the income in the short-medium term.
Baxter said the sale was driven by the prestigious Collins St address, strong tenancy profile including Telstra at ground level, outstanding condition of the building throughout, and numerous value-add opportunities available to the purchaser.
The 3,756 sqm office building occupies a 441 sqm site zoned Capital City 1.
“Several local and Asia-based investors were extremely keen to purchase this property and, in a reversal of the recent trend in the market, it was a local investor who prevailed and secured the 12-level building.
“Investors recognise that strategic central CBD properties such as this are the best placed to benefit from the apartment and population boom currently occurring in central Melbourne, leading to greater retail spending and a growing local professional workforce throughout the city in coming years.
“Furthermore the recently announced $1.25 billion Cbus mixed-use redevelopment of 447 Collins St, only 80 metres from the property, provides a significant additional future benefit,” he added.
Baxter said appetite for CBD properties in the $10 million to $50 million bracket shows no signs of abating with the wave of capital from Asia continuing to flow into Melbourne.
Australian Property Journal
