This article is from the Australian Property Journal archive
MOMENTUM is picking up in Melbourne’s city office market, with the former home of music and electronics retailer Brashs listed for sale with hopes of at least $50 million.
The 108 Elizabeth Street offering consists of two adjoining, fully leased office and retail buildings, including what was known as the Carnegie & Sons building dating back to the 1900s, and is being offered for the first time in 35 years.
The listing comes a few weeks after Impact Investment Group sold the empty 11-storey 401 Collins Street office building for $70 million, soon after global co-working space operator WeWork gave up on its lease as it struggled with pandemic lockdowns.
Centrally located between Collins and Bourke Streets, the fully refurbished 108 Elizabeth Street features flexible office floor plates with exclusive amenities to attract tenants that prefer their own self-contained office spaces. The seven-storey building has managed to be consistently leased throughout COVID-smashed 2020 and 2021 and tenanted by international and publicly listed tenants, generating an income of approximately $1,819,574 per annum with fixed annual rental increases built into each lease agreement.
JLL’s Josh Rutman, Director Nick Peden and Associate MingXuan Li together with Allard Shelton’s Joseph Walton, Patrick Barnes, Michael Ryan and Christian Hatzis have been appointed to the expressions of interest campaign.
“There has been a distinct lack of quality investment stock on market with reliable income streams and given the building leased exceptionally well throughout the recent lockdown periods, investors will draw great confidence that the asset will stand the test of time”, Rutman said.
“Whilst buildings like this always hold infinite appeal due to the sheer shortage of supply, 108 Elizabeth Street is arguably more attractive to buyers given its attractive size and strong tenant mix which demonstrates its ongoing appeal for today’s business occupiers.”
Walton said the building is essentially brand new with no projected short-term costs for an incoming purchaser, and that based on its recent leasing record will continue to be well sought-after by tenants. He also noted its depreciation benefits.
“108 Elizabeth Street is an ideal fully leased investment that is not dissimilar to a block of residential apartments in that when vacancy arises, tenants are quick to fill the space and start paying rent,” he said.
Nearby, local fund managers Marprop Real Estate Investors and Futuro Capital bought the Victoria University campus at 300 Flinders Street late last year for $80.8 million. The 14,000 sqm strata-titled property will be refurbished after Victoria University vacates later this year. It will be moving into a new $400 million vertical campus on Queen Street being developed by ISPT.
