This article is from the Australian Property Journal archive
STERLING Global has made a quick profit of more than $50 million in less than 20 months, by selling 383 La Trobe St in Melbourne to Mirvac for $122 million.
Sterling Global bought the Australian Federal Police headquarters in July 2015 with a deferred settlement of up to 18 months, and settled on the purchase in January 2017.
Backed by Qi Qi Li, Zhimin Guo and Liwen Zhao, Sterling Global had initially planned to take on famed French architect Jean Nouvel’s design for a $700 million building with 488 one, two and three-bedroom apartments and 98 hotel rooms, which the iconic designed dubbed “The Tower of Seven Colours” for its multi-tone and reflective façade.
However, Mirvac is looking to redevelop the site into a new A-grade office tower of 40,000 sqm, marking another major commercial project and significant transaction in the city’s west.
The off-market deal was struck at $122 million, at an initial yield of 5.7%, by Knight Frank’s Paul Henley and Stephen Kelly. Currently, the 2,845 sqm site has a seven-level, B-grade office of 10,200 sqm that is fully leased to the AFP, which will vacate the building.
Mirvac’s head of office and industrial, Campbell Hanan, said the acquisition presented a “rare opportunity to secure a significant development asset in a well-located part of Melbourne’s CBD, while providing the group with secure income over the medium term”.
“We continue to see strong market fundamentals in Melbourne, as well as limited future supply options for tenants beyond the current development cycle. This acquisition allows us to grow our presence in this key gateway city, while adding to our current $3.1 billion commercial development pipeline.”
Also in the western precinct of the CBD, the diversified property group is currently undertaking development of the 40-storey, 58,000 sqm Olderfleet development at 477 Collins Street, which it sold a 50% interest in to Singapore-listed Suntec REIT for $414.17 million last year.
Around the same time, Mirvac offloaded a half-share in its 26,000 sqm 664 Collins Street project to a Morgan Stanley fund for $138 million, and Singapore’s Keppel REIT took a 50% stake in the future Victoria Police headquarters development at 311 Spencer Street from Australia Post for $347.8 million.
More recently, fund manager EG sold the 12-level B-grade 277 William Street building to the Hong Kong-based Fu family’s KHI Holdings Group for $93.88 million.
A Macau-backed investor paid $40.1 million for the Melbourne CBD headquarters of national co-working business Christie Spaces at 454 Collins Street, which is directly across from Cbus Property’s 447 Collins Street mixed-use “Pantscraper” dual-tower development on the corner of Collins Street and William Street.
This acquisition is Mirvac’s major deal in a week after it sold a 50% stake in the Calibre development in Sydney’s Eastern Creek.
Australian Property Journal
