West Melbourne office fetches c$22 million

The West Melbourne office is tenanted to Norman Disney & Young and Probuild.

An inner-city Melbourne office designed by the late and bold architect Ermin Smrekar, is understood to be selling for a speculated price of more than $22 million to interstate institutional investor IOOF.

The four-storey brick and clad complex, with 2791 square metres of Premium grade commercial space, is at 115 Batman Street, West Melbourne, within cooee of the CBD grid.

The asset returns annual rent of $1.154 million being fully leased to two tenants: Norman Disney & Young and Probuild.

On that basis it is selling on a passing yield of less than 5.2 per cent.

On an 853 sqm block with high-density redevelopment potential, the marketing agents promoted that a 27-storey apartment building is under construction next door at 83-113 Batman Street.

The Deague Group acquired 83-113 Batman Street in 2015 for $38 million permit-ready for new towers containing a total of 522 dwellings. Deague bought this 3839 sqm parcel from Hume Partners, the private investment house backed by BRW Rich List member Peter Scanlon.

In mid-2015, local developer Trenerry Property paid Australia Post $40 million for a 9200 sqm development site, nearby, at 185 Rosslyn Street.

Trenerry, with project partners the Victor Smorgon Group and the Kanat family, is now replacing the Rosslyn Street plot with West End – a mixed-use village which upon completion will contain 377 flats, 92 serviced apartments and 4580 sqm of retail.

Also in the area, quarry owner Paul Lofitis is planning a 20-storey apartment complex to extend the historic Dalston’s Bakery building at 405-421 Spencer Street, on the north-west corner of Batman Street.

Vicland Property Group, headed by Bill McNee, recently completed a 38-storey apartment building at 420 Spencer Street, at the south-east intersection of Dudley Street, a property adjacent to the Lofitis holding.

Mr Smrekar, who died in 2016, was a renowned commercial and residential architect. His highest profile project is arguably the ornate former Old Melbourne Hotel at 5-17 Flemington Road, North Melbourne (this site is now a student accommodation complex occupied by the Royal Melbourne Institute of Technology).

About five years ago, Stamoulis Property Group demolished a CBD office penned by Mr Smrekar, 568 Collins Street, replacing it with a 69-storey apartment complex.

Savills Clinton Baxter, Nick Peden, Jesse Radisich and Benson Zhou, with Bayley Stuart’s Alasdair MacGillivray and Andrew MacGillivray marketed 115 Batman Street, West Melbourne.

An aerial image showing 115 Batman Street, West Melbourne (outlined) in relation to the city.

Marc Pallisco

A freelance property writer and experienced analyst, Marc is the co-founder of realestatesource.com.au

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