This article is from the Australian Property Journal archive
Domestic banks are backing the counter cyclical play by Melbourne-based investment manager Bayley Stuart, which has secured finance and settled on its $42.55 million acquisition of an office building in Melbourne, Australian Property Journal can reveal.
CBRE debt & structured finance NSW & ACT head Daniel Sollorz and analyst Will Diversi arranged the debt finance.
The senior debt facility was signed with a domestic bank to fund the purchase of at 468 St Kilda Road.
“The transaction represents a counter-cyclical return to where Bayley Stuart was founded. Their unsurpassed IP and expertise in this sub-market, combined with attractive ingoing acquisition metrics, contributed to a strong transaction appeal in the debt market,” said Sollorz.
Bayley Stuart acquired the building last year from the Australian Unity Office Fund and after securing finance, has settled on the purchase – the first major office settlement in Melbourne for 2025.
Colliers’ John Marasco, Matt Stagg, Anna Cavar with Knight Frank’s Trent Preece and Tom Ryan brokered the transaction.
The 14-storey B-grade office building has a total net lettable area of 11,210 sqm, occupying a prime 2,318sqm site within a Commercial 1 Zone.
The building is approximately 75% leased with a 2.5-year WALE, anchored by TLC Aged Care who also has building naming rights.
Colliers Victoria head of investment services Matt Stagg said reflecting a capital value of $3,795 per sqm of net lettable area, this purchase presented a compelling counter-cyclical office investment given the quality of the building.
Knight Frank’s head of institutional investment Trent Preece said the property was the first genuine office investment sale along St Kilda Road in over three years.
“Buyer depth has significantly improved over recent months, and St Kilda Road offers strong medium-term growth potential, with office withdrawals for residential development driving the vacancy rate down,”
Andrew MacGillivray, managing director of Bayley Stuart, said in the near term, it will undertake works to enhance the arrival experience to further elevate occupier appeal.
He added that the property will become the second asset in Bayley Stuart – The Precincts Office Fund, a boutique multi-asset fund established two years ago to capitalise on market cycles.
“Our strategy remains focused on selectively acquiring quality assets at attractive valuations that will benefit from our hands-on management approach,” MacGillivray said.
