This article is from the Australian Property Journal archive
MELBOURNE’S leafy boulevard St Kilda Road is set for its first major office building sale campaign in 2022, with local investor and developer GLG hoping for more than $65 million for a trophy asset.
The sale is part of GLG’s strategy to reinvest in its significant office and residential pipeline.
Located at the northern end of St Kilda Road, number 437 features a six-level, 6,673 sqm office building offers exceptional views of the boulevard and the Melbourne CBD. It is on a prominent corner site on a 3,000 sqm landholding adjoining Fawkner Park.
CBRE and Dawkins Occhiuto have been appointed to manage the expressions of interest campaign for 437 St Kilda Road.
CBRE’s Kiran Pillai said the property was expected to receive an even spread of interest across the investment and development sectors.
“Trophy opportunities of this size and in this location are rarely offered. Given the high quality, albeit under rented nature of the office building, and the extraordinary development potential of the site, we expect to see investors and developers going head-to-head,” Pillai said.
Andrew Dawkins of Dawkins Occhiuto said infrastructure investments in the surrounding precinct will be one of the drawcards for potential purchasers. The Anzac train station set to open by 2025 as part of the Metro Tunnel project, and combined with the future Metro Rail Loop will get people to Melbourne airport in about 30 minutes.
Expressions of interest will close on 28th April.
It presents the first opportunity for a major sale in the precinct since Sydney-based Rathdrum Properties snapped up 570 St Kilda Road for $67.6 million from Terraplex over the summer. That sale represented a fully leased initial yield of 5.41% and a capital value rate of $8,840 per sqm.
St Kilda Road saw net effective rents drop 8% to $284 per sqm due to rising incentives in the past few months.
Major recent leases include Alfred Health taking up 8,247 sqm at 541 St Kilda Road.
The precinct is set to see the first Marriott Executive Apartments in Australia, with Marriott International and Sunnyland Investment Group signing an agreement late last month. The 180-key all-suite hotel will be part of a larger $170 million mixed-use development at 472-474 St Kilda Road, a short distance across the way from number 437.
The future Marriott site has been home to major advertising agency Clemenger, which has just announced it will be moving to the David Jones menswear building in the CBD.
