This article is from the Australian Property Journal archive
CHARTER Hall has sold the former Foxtel building at 1 Dean Street in Moonee Ponds to MP Investments Management for $38 million, in the largest Melbourne Metro office sale so far this year.
1 Dean Street sits around 6km north west of the Melbourne CBD, placed between Moonee Valley Racecourse and Pascoe Vale Road, on a 6,641sqm site with a 67-bay multi-deck car park and 7,104sqm of A-grade office space.
Daniel Wolman, Oliver Hay and Leon Ma from Cushman & Wakefield, alongside Raff De Luise of Gross Waddell ICR, managed the off-market sale to the company owned by the Macau-based Ho family.
“1 Dean Street stands out as one of the few large commercial assets in Melbourne’s Northern precinct, offering sustained cash flow and strong future value-add potential,” Wolman told Australian Property Journal, international director and co-head of investment sales, VIC at Cushman & Wakefield.
“The considerable interest from numerous groups highlights the robust investor appetite for similar assets, indicating a positive trend for future capital deployment in Melbourne.”
This comes as the Victorian capital’s office market looks likely to see its lowest annual level of sales in two decades, with sluggish leasing activity, high vacancy rates and the gap between buyer and seller expectations ballooning.
Interest was also driven by the property’s long-term lease to a prestigious government tenant on top of the ample potential for future residential development.
“The buyer’s unconditional purchase without a due diligence period reinforces the strong demand and promising outlook for the Melbourne commercial property market,” DeLuise, director and partner at Gross Waddell ICR.
“This strategic acquisition not only represents a steady income stream but also provides ample time for planning future value-add opportunities. The continuing favourable exchange rates and confidence in land rich assets on the fringes of major cities are driving the deployment of Asian capital into Australia,” he told Australian Property Journal.
Charter Hall purchased the property in 2007 for $28.5 million, before the group’s Direct PFA Fund unsuccessfully listed the property in 2018, asking for circa $45 million.
With Foxtel moving to Sydney’s Macquarie Park, Charter Hall undertook a re-leasing campaign and secured the Department of Agriculture, Water and Environment as the majority tenant at the site, on an initial 12-year term.
With 1 Dean Street now divested, the Charter Hall Direct PFA fund is now worth $1.6 billion across 17 properties with 98% occupancy and a WALE of 5.4-years.
Refurbishments at the Moonee Ponds property resulted in a reconfigured lobby with cafe, new end-of-trip facilities and a targeted minimum 4.5-star NABERS Energy Rating.
