Boston’s AEW Capital Management pays $200 million for Melbourne CBD office

Boston’s AEW Capital Management is paying more than $200 million for a 22-storey office in Melbourne’s tree-lined Queen Street.

AEW is acquiring the asset off-market from Challenger, which we reported in 2011 paid FKP $81 million for it.

It is AEW’s first Melbourne acquisition.

At the south-west corner of Flinders Lane, 31 Queen Street did enjoy view lines to the Yarra River, and Southbank, over the low-rise buildings next door.

31 Queen Street, Melbourne, has sold for $200 million.

However with Caydon developing the former Fletcher Jones building at 1-5 Queen Street into a 24-storey hotel, this aspect is lost.

Number 31 Queen Street contains five levels of car parking with 172 bays. It was completed in 1976 and renovated between 2007-2011 at a cost of $13.7 million.

It offers 19,213 square metres of area.

Dexus is in due diligence to buy three assets including two offices at the north-west corner of Collins and Exhibition streets.

JLL’s Nick Rathgeber and Leigh Melbourne brokered the sale of 31 Queen Street on a yield of about 5 per cent.

Their deal comes two weeks after it was revealed Dexus was in due diligence to snare two office buildings at the north-west corner of Collins and Exhibition streets from QIC.

Last September, Dexus paid $230 million for two office buildings at the north-east corner of this intersection.

In October, Charter Hall paid $140 million for a rundown office a 555 Collins Street, next door to another asset it owns, 55 King Street.

In November, Industry Superannuation Property Trust acquired three properties from Victoria University – and committed to building a 32-level vertical campus, which it will lease to the school.

Last month, GPT Wholesale Office Fund paid $342 million for the half-share of 2 Southbank Boulevard, Southbank, which it didn’t own. GPT had valued its half share at $279.9 million last June.

Marc Pallisco

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

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