This article is from the Australian Property Journal archive
A MAJOR core Melbourne CBD office tower at 628 Bourke Street is set to enter the market next week, after a major refurbishment program valued at nearly $35 million.
Originally constructed in 1989, the refurbished A-Grade office building sits on a 3,301sqm site, with four street frontages, with 24,127sqm of net lettable area, which is 90% leased to majority government and listed corporations.
Trent Preece, Ben Schubert, Justin Bond and Neil Brookes from Knight Frank have been exclusively appointed to sell the asset via an international expressions of interest campaign, on behalf Swiss owners, AFIAA.
AFIAA acquired the office tower in 2017 for around $185 million from M&G Investments.
“The asset will be highly sought after by domestic and offshore buyers given the prime location on the prestigious Bourke Street only 150 metres from Southern Cross Train Station,” said Preece.
The building’s recent nearly $35 million refurbishment program including a new ground floor lobby and retail activation, state of the art end-of-trip facilities, full lift upgrade and expansive recreational deck including outdoor terrace and tennis court.
“Investors will be attracted by the significant recent investment in the building, positioning the asset to capitalise on flight-to-quality trends and significant rental reversions upon lease expiries,” added Preece.
“Furthermore, buyers will be buoyed by the strong fundamentals. At a time when institutional-grade Melbourne CBD assets continue to be tightly held, 628 Bourke Street provides the dual benefit of a strong underlying income profile combined with unimaginable future development potential.”
The property has substantial long-term redevelopment potential of around 60,000-70,000sqm GFA and ESG credentials including a 5.0 Star NABERS Energy rating and 5.5 Star NABERS Water rating.
628 Bourke Street has a WALE of 2.0-years, with CPB Contractors occupying 49.2%, Academies Australia Polytechnic occupying 13%, NTT Data 5.4%, V/Line 5.3% and Kinetic IT 5.3%.
“Melbourne continues to be highly sought after by global capital on the back of record infrastructure investment, high population growth and robust economy. Melbourne has already overtaken Sydney as the largest office market in Australia and its population is forecast to overtake Sydney late in the decade,” said Preece.
“Following the significant recent jump in the return to office numbers with occupancy rates now in line with the Sydney CBD, investors are strongly focused back on the Melbourne CBD.”
This as confidence returns to the city, with Melbourne’s CBD leading the country in retail vacancies, falling to single digits at 5.67%.
