This article is from the Australian Property Journal archive
OFFSHORE investors continue to show faith in the future of Australia’s CBDs and buy up office buildings, with Singapore-listed Straits Trading Company forking out $150 million for neighbouring complexes in Melbourne’s Docklands.
Straits Trading Company has bought the A-grade pair of 1010 La Trobe Street and 192 Harbour Esplanade from City Harbour – recently rebadged from Digital Harbour – which is backed by the wealthy Liberman family, Qualitas and three smaller investors.
1010 La Trobe, known as Customs House, is a fully occupied nine-storey building of 15,354 sqm occupied by the Department of Home Affairs and state-owned VicTrack, which owns the state’s train and tram rail infrastructure.
Next to it is the five-level 192 Harbour Esplanade, known as the Innovation Building, of 5,779 sqm that is mostly occupied by NBN Co.
The buildings are on a combined land parcel of 6,811 sqm.
“Despite lockdowns and restrictions on workplaces in the past year, the transaction is in line with the group’s business expansion plans and is reflective of Straits Real Estate’s confidence in post-COVID recovery of Melbourne commercial real estate.”
“In addition to strong recurring income, the properties present value-add opportunities including a planned upgrading at 1010 La Trobe that will include a new end-of-trip facility, redesigned ground floor lobby and refurbishment of communal facilities on each floor.
The sale also included 163 parking bays as part of the car park in the podium of 1000 La Trobe Street.
John Marasco, Anna Cavar, Oliver Hay and Adam Woodward of Colliers, together with CBRE’s Mark Coster, Kiran Pillai, Scott McGlone and Stuart McCann, sold the properties after they were put to the market in July last year.
Straits Trading Company’s purchase arrives just after Hong Kong-listed Link REIT took a 49.9% share in the $2.3 billion Investa Gateway Office portfolio of five Sydney and Melbourne buildings.
There is still confidence in CBD offices despite two years of many desks – in Sydney and Melbourne in particular – sitting idle. According to the Property Council of Australia’s latest Office Market Report, tenant demand improved by an average of 1% across the CBDs in the six months to January. Sydney’s vacancy rate was at 9.3% and Melbourne’s lifted to 11.9%.
Dexus closed 2021 with $555 million of office deals as part of a $1.5 billion selldown, and US giant Blackstone took a half share in Sydney’s Grosvenor Place for $925 million.
