This article is from the Australian Property Journal archive
AN office building on the corner of King and Flinders streets in Melbourne’s CBD had hit the market with expectations of around $50 million, primed for an upgrade into a new headquarters.
Overlooking the bend in the railway lines between Flinders Street and Southern Cross stations, the nine-floor 525 Flinders Street has 10,271 sqm of net lettable area and boasts expansive views of the Yarra River, Southbank, and the city skyline.
Swiss institutional investor AFIAA had lobbed the asset to the market with a short-term weighted average lease expiry. It has engaged Nick Rathgeber, Leigh Melbourne, Daniel Wolman, Oliver Hay and Leon Ma of Cushman & Wakefield to handle the listings.
“This is a unique opportunity to secure a high- profile asset in Melbourne’s CBD, with excellent prospects for capital growth. The building’s views and location are unmatched, and with some strategic investment into upgrade initiatives, it can become one of the city’s standout office headquarters,” Wolman said.
Interest is anticipated to come from investors and businesses.
In keeping with trends of office valuation declines as the sector faces structural headwinds, the expected price is $5 million below what AFIAA paid in 2012.
This listing comes after AFIAA sold 628 Bourke Street for $115.8 million to Bayley Stuart. The sale result will be disappointing for the Swiss fund as the sale price is below the $185 million it paid M&G Real Estate seven years ago and AFIAA spent a further $35 million refurbishing the building.
The Dexus Wholesale Australian Property Fund recently sold Melbourne CBD building 425 Collins Street for around $40 million, at a decent discount to its peak value, while Nine media has reported the office of online retail giant Alibaba, just a stone’s throw away at number 411, has sold for around $30 million, 25% below what it last sold for in 2020.
