This article is from the Australian Property Journal archive
A PARTIALLY vacant commercial building on Melbourne’s St Kilda Road has hit the market, offering potential buyers strong rental upside within the new ANZAC train station precinct.
432 St Kilda Road occupies a 2,327sqm site and boasts a net lettable area of 9,128sqm, plus 136 car parking spaces with potential for a fully leased income of around $4.4 million per annum.
Paul Kempton, Josh Rutman, Piper Dedrick, and Tim Carr from JLL have been appointed to manage the sale via an international expressions of interest campaign, on behalf of global asset manager Abrdn.
“432 St Kilda Road also offers an immediate opportunity for positive rental reversion. Benchmarking recent leasing deals in the area demonstrates the possibility to increase current rents by an average of 15% presenting a strong immediate uplift,” said Rutman, head of capital markets – Victoria at JLL.
“It offers efficient floorplates able to be divided for a range of smaller tenant requirements, along with interconnected stairs on Levels 11 and 12 capable of attracting larger, corporate tenants.”
One of the major drawcards of the property is its placement near recent major capital expenditure, with the new ANZAC underground train station precinct set to open in 2025.
“Upon completion of the Anzac Station, the vacancy rate in the Anzac precinct is expected to substantially improve in line with this trend and present as a compelling office investment destination,” said Kempton, head of office investments—Victoria at JLL.
In the Melbourne CBD, train station precincts vacancy rates are on average 3.9% lower than non-train station precincts over a 10-year period, according to JLL Capital Markets analysis.
With the current vacancy rate of train station precincts at 9.3% and well below the market vacancy of 19.6%.
“With current vacancies and recent capital works, the property is positioned to leverage the opportunities in one of Melbourne’s more established, inner fringe office precincts,” said Dedrick, associate director institutional investments–Victoria at JLL.
As well as being within close range of the CBD, the property is in walking distance to the dining precincts on Domain Road, shopping in South Yarra on Toorak Road and leading tenant amenity including Albert Park, the National Gallery of Victoria and the Shrine of Remembrance.
“Melbourne’s accelerated economic growth, burgeoning population, and climbing demand for residential over the coming decade make a strong argument for residential development,” added Kempton.
The international expressions of interest campaign for 432 St Kilda Road is scheduled to close on 3 October 2024.
