This article is from the Australian Property Journal archive
A HAWTHORN office has sold for more than $15 million, reflecting a 3.4% passing net yield, as inner-city commercial opportunities continue to draw in investors.
The building, located at 313-317 Burwood Road, spans 1,855sqm across four-levels occupying a 1,185sqm landholding and boasting dual frontage to both Burwood Road and Lynch Street.
David Bourke, Chris James and Shawn Luo of Fitzroys managed the sale of the property via an expressions of interest campaign on behalf of private owners.
“The purchaser is a local investor who had been looking to get into the Melbourne office market for several years, and this asset ticked all the boxes in terms of its location, profile, and ideal positioning in the current market environment,” said Bourke.
The building hosts tenants including BIG4 Holiday Parks, Leighton O’Brien, Fuse Recruitment and HID Accountants, for a combines WALE of 4.1-years.
“Buyers were all very comfortable taking on the small leasing risk in the property,” added Bourke.
The property also features a high ration of on-site parking with the capacity for 68-cars across two levels and sits within close proximity of Swinburne University and the Glenferrie retail and lifestyle strip, with easy access via major roads and public transport at its doorstep.
“Hawthorn has emerged as a ‘one-to-watch’ among Melbourne’s commercial markets, situated in an inner-suburban sweet spot that is currently attracting tenants from central locations and further out in the suburbs. The campaign showed that reputation extends to local and offshore interests,” said Bourke.
Hawthorn’s office market has been growing steadily, with businesses seeking quality spaces in highly accessible areas and lifestyle and hospitality offerings to draw workers.
This trend is demonstrated in the immediate surroundings of 313-317 Burwood Road, which sits amongst both national and local corporations such as Orora Group, Xero, AV Jennings, FIMG and United Petroleum.
Despite setbacks from the COVID-19 pandemic, office tower investment in Melbourne and Sydney experienced an upswing over the third quarter, with the this September quarter marking the second strongest on record, with $5.9 billion nationally spent on the asset type.
“Investors understand that more businesses will be moving into this segment of the market amid ongoing reassessment of space requirements, and that tenants had sought out this particular building in the current environment. This has delivered the asset reliable long-term income streams and supported the strong WALE profile, providing confidence for buyers in ongoing demand,” concluded James.
