This article is from the Australian Property Journal archive
SINGAPOREAN investor HThree City Australia has shirked lockdowns at home and abroad to make its first acquisition in Australia, with the near-$73 million purchase of a Melbourne city office tower.
Located near the corner Queen Streets, in the western core of the CBD, the 12-storey freehold building accommodates over 5,500 sqm of net lettable area and features a 4-star NABERS energy rating.
The western core is anchored by the newly completed Collins Arch and Olderfleet mixed-use projects.
Led by CEO Kevin Kang, HThree completed the transaction within a 10-week window.
“Notwithstanding the increasing prevalence of work-from-home arrangements, we are strong believers in the office sector and even more so of the Melbourne office market,” Kang said.
“There will always be a need for companies to have a physical office space, although the form of the office environment as we know it now will evolve over time.”
Property Council occupancy data shows just 7% of Melbourne office floors are being actively used, and alongside Sydney it was one of just two CBD markets to record an increase in office vacancy rates in the six months to July.
Legal advisors to HThree on the property acquisition were David Sinn and Julia Orbach from Herbert Smith Freehills. Advising on the property financing were Ken Nguyen and Sophie Ng from Ashurst.
Sinn said the investment by HThree continues to demonstrate the strength of the Australian commercial real estate market, despite the current COVID challenges, and the strong investment flows from Singaporean investors who have been one of the largest sources of foreign capital into Australia over the past 12 months.
Singaporean investors accounted for $4.11 billion of commercial real estate transaction activity in Australia in the first half of the year, well above the next main capital source, the US.
Following on from the 446 Collins Street acquisition, HThree will continue to look for opportunities in the Australian office market within its investment mandate to grow its Australian portfolio, it said.
The off-market deal was brokered by CBRE’s Kiran Pillai, Scott McGlone, Mark Coster and Stuart McCann.
“The strength and speed of the deal speaks volumes in relation to the emphasis that international investors are placing on continued investment into Melbourne. As other major markets in the region re-open and vaccination rates surge locally, we are seeing both international and local groups placing more and more focus on the office sector as the return to the office effort builds momentum,” Pillai said.
Vantage Property Investments managing director Matt Spring said, “We are pleased to have produced an exceptional result for our private investor client.
“Vantage’s philosophy is to create income and value through the identification of quality buildings in excellent locations, with sound property fundamentals.”
