This article is from the Australian Property Journal archive
MELBOURNE'S office market is set to be tested for the first time this year with the offering of 575 Bourke St by the newly privatised Valad Property Group.
The property was purchased by the Valad Core Plus Fund in December 2005 for $50.87 million and is one of the major assets to be offered by Valad since it was taken over by New York Stock Exchange listed Blackstone’s real estate private equity fund for $806 million in August last year.
James Kaufman and Robert Anderson of Jones Lang LaSalle in conjunction with Martin O’Sullivan and Mark Coster of CBRE are conducting an expression of interest campaign closing Thursday 31st May.
Anderson said the property occupies a premium CBD location surrounded by some of Melbourne’s most highly regarded commercial towers, the Law Courts and Southern Cross Train Station.
“Melbourne is such a tightly held market, particularly for well leased A grade assets such as 575 Bourke St. It will be a great test of the market and interest is expected from both local and international investors,” he added.
Coster said a number of the current tenants have been occupiers in the building for multiple terms, a testament to the strength of the asset and its ability to attract and retain tenants.
“The multi tenanted nature and staggered lease expiry of the asset underpins the high quality cash flow,” Coster said.
Kaufman in addition to the strong current cash flow, there is the opportunity to capture positive market rent reversion in the short term and this corresponds with strong forecast net effective rental growth in the Melbourne CBD of 4.1% pa over the next three years.
The 16 level quality office tower, with ground level retail and two-level basement car park comprises a net lettable area of approximately 16,201 sqm and extremely flexible floor plates of 1,050 sqm.
The property is 89.09% leased to long term tenants including Logie Smith Lanyon, McKean & Park, EO Financial Services and Equity Trustees Limited.
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