Bayley Stuart buys two more east Melbourne offices

Becton had the land gazetted from CBD to East Melbourne when it developed 289 Wellington Parade South.

Bayley Stuart has swooped on two more inner east Melbourne offices.

In the most recent deal, the fund manager is outlaying $51.785 million, reflecting a 4.5 per cent net passing yield, for 289 Wellington Parade South, East Melbourne, opposite Treasury Gardens.

The East Melbourne office has north facing Treasury Gardens views.

Constructed by Becton in 2009 – and briefly occupied as that group’s headquarters – it contains 5526 square metres over five floors, and 58 basement car parks.

Development upside is presently limited; the property forms part of a strata controlled with 102 apartment owners in an adjoining 19 level tower, 279 Wellington Pde South.

Artist’s impression of Treasury Square (left), with three buildings.

Colliers’ Daniel Wolman, Matt Stagg, Oliver Hay and Leon Ma represented the vendor, MRS Property’s Harmony Property Investments, which paid Becton $27m in 2010.

“289 is a fantastic investment grade asset that Harmony has proudly managed on behalf of our valued investors…delivering strong returns throughout” MRS director Lloyd Ioannou said.

“The fundamentals of the property remain as true today as ever being its premium location, quality of build, consistent ability to attract and retain strong tenant covenants not to mention the future upside upon activation of the [neighbouring] Treasury Square precinct,” he added.

289 Wellington Parade South

About 1024 sqm – or 18.5pc – of the East Melbourne office is vacant.

The yield would rise to six per cent if it weren’t.

“The transaction demonstrates long term investor confidence in high quality and well-located Melbourne CBD and city fringe office assets despite the current rising interest rate environment,” Mr Wolman said.

“The property also directly neighbours the proposed Treasury Square development spanning over one hectare and comprising three…towers,” he added.

Cbus and Mirvac were in 2020 shortlisted to deliver that proposal (story continues below).

Bayley Stuart is paying $86 million for 20-30 Mollison Street, Abbotsford.

Elsewhere in the suburb, developers Lyons Group and Pelligra recently purchased small sites: the ex-Cliveden Hospital and former Albert Heights serviced apartment complex, respectively.

About 2078 square metres of 20-30 Mollison Street is for lease.

Luxcon Group, Orchard Piper, Pask Group and PB&Co also control East Melbourne residential building blocks – the latter, the historic Eblana, built in 1863 by Thomas Jackson, who with his cousin Henry Young owned the Young & Jackson Hotel, opposite Flinders Street Station.

In June, Elizabeth Ring, the ex-wife of Swisse Wellness founder Stephen, outlaid a speculated $22m for the outgoing Police Association of Victoria headquarters, on the north west corner of Albert and Clarendon streets, as an investment. Not long earlier Malaysian businessman Admond Looh paid the Krongold family $23m for the fully leased Marlion House in the suburb, on Agnes St.

Craft Works collects $86m

Meanwhile in a funds through deal quietly struck last year, Bayley Stuart is paying CHT Architects’ David Carabott and builder Hamilton Marino $86m for the Craft Works office (pictured, top) at 20-30 Mollison St, at the north east corner of Nicholson, in Abbotsford.

Over seven floors, with 9664 sqm, and an activated rooftop, it too carries a vacancy – about 21.5pc.

The property replaced the ex-Sabena clothing factory which later dubbed as the headquarters for Rove McManus’ media company.

Abbotsford is about two kilometres from town.

Elsewhere in Melbourne’s inner-east, Bayley Stuart, founded in 1991 by ex-Hooker Projects agent Alasdair MacGillivray and now run with his son, Andrew, controls two Cremorne offices – 600 Church St, acquired in 2018, and 1-11 Gordon St, bought the year later.

Each cost $50m, purchased on a funds through basis.

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of