This article is from the Australian Property Journal archive
A COMPANY backed by Prince Abdul Qawi of Brunei has made a foray into Melbourne with the acquisition of the Victoria University building for $23.6 million, $5.6 million above reserve price.
The Singapore Stock Exchange listed KLW Holdings has bought 301 Flinders Lane, joining the growing list of Singaporean, Malaysian, mainland China and Hong Kong investors heading into Melbourne.
Singaporean buyers alone have spent $1.12 billion in Melbourne in the last 12 months, according to Savills.
“This quality asset will provide immediate cash flow and returns for the group as a mid-term investment with great potential for capital appreciation while having the potential opportunity for future redevelopment,” KLW chairman Prince Abdul Qawi said.
Savills’ Clinton Baxter and Nick Peden negotiated the sale and leaseback deal and said the price reflects a low yield of 5.3%.
“We received a multitude of tenders for the property from a wide range of local and offshore purchasers. The sale price is approximately $5,600,000 beyond the vendor’s reserve price and provides an excellent illustration of the premium available in the current market for prime CBD properties,” Baxter said.
The seven level office building is fully fitted and utilised by Victoria University for both education and administration functions. It comprises 5,690 sqm and was sold subject to a six-year leaseback from settlement at a rental of $1.26 million p.a. net with fixed 3.5% annual increases.
Peden said the sale is further evidence of the exceptionally strong offshore buyer demand for high quality CBD investment assets.
Vic Uni’s facilities director Gary Carter said the University was delighted with the result.
Vic Uni bought 301 Flinders Lane for just $4.8 million in 1998, with the property having escalated by an average of 10.5% per annum over the 16 years of ownership. Last year, the university sold the neighbouring 300 Flinders St campus building for $48.5 million to Hotel Grand Central of Singapore in another transaction handled by Savills.
Australian Property Journal
