This article is from the Australian Property Journal archive
HOTEL property investors and developers are invited to take a sip of Melbourne's Tea House building, which is for sale via a public tender.
The iconic Tea House building at Southbank has been put on the market by the Victoria Government’s Department of Treasury and Finance.
CB Richard Ellis’ Jay Rowlings and Mark Wizel have been appointed to sell the property at 28 Clarendon Street building via a Public Tender which closes Wednesday September 03 2008.
Built in the 1882, the National Trust-listed building is located directly opposite Crown Casino and was used as a tea warehouse until the 1950s. It was significantly refurbished in 1964 before being acquired by the Victorian Government in 1991.
The distinctive building is located on a substantial parcel of land which provides secured car parking for 61 vehicles. The complex has a total net lettable area of 3,192 sqm over six levels.
Rowlings said the Tea House represents a once in a lifetime opportunity to purchase an iconic property positioned on a large parcel of land on the edge of the Melbourne CBD.
“It appeals to all buyer types and has several angles for potential buyers to explore,” he added.
Rowlings said the property was fully leased to a spread of tenants, returning total annual income of approximately $487,000.
However, there was significant rental upside, given that the current rental rates were circa $150 a sqm – which was well below market levels.
“With the forecast for Melbourne and City fringe office rents to continue to increase, we would expect the Tea House would command rents of $220 – $250 per sqm. With leases expiring at the end of 2009 this gives investors the opportunity to significantly increase the income and have control of lease terms and market reviews,” he continued.
Wizel anticipated that there would be strong interest from Asian purchasers given the recent downward pressure on the Australian dollar, which had been a catalyst for an increase in interest from purchasers located throughout Asia.
The property’s close proximity to Crown Casino was expected to be another drawcard
“Properties located close to casinos tend to rarely suffer from any form of vacancy.
“There is significant value being added to the area surrounding the Tea House, with the development of the new convention centre and with Crown having commenced construction on a new hotel which is mooted to be the largest hotel in Australia by number of rooms,” Wizel said.
Australian Property Journal
