Carsales founders bank $60.25m from office

Sushi Sushi’s uber-modern headquarters at 545 Blackburn Road.

A syndicate including founders Greg Roebuck and Wal Pisciotta has sold a Mount Waverley office to the $6.7 billion Frasers Logistics and Commercial Trust.

The five storey, 7257 square metre A-grade building with 335 car parks at 545-547 Blackburn Road is trading for $60.25 million reflecting a 4.97 per cent net passing yield.

The Mount Waverley building contains 7257 square metres of A-grade lettable area and a balcony.

The vendor developed the asset speculatively on a 3803 sqm site acquired for $2.4m in December, 2014.

It was offered for sale fully leased with a 5.3 year Weighted Average Lease Expiry.

“It has been a nine year journey of planning and development to bring our vision to fruition for 545 Blackburn Rd,” the syndicate’s chief executive, Lee Mayberry, said.

The new Frasers asset includes a ground floor cafe tenancy and 335 basement car parks.

“We had long term hold intentions…which is why it was built to such a high quality specification,” he added.

“Our patience enabled us to put together an equally high quality tenant profile, with the building attracting occupiers mostly from the local area,” according to the representative.

“However, a number of factors aligned making it more suitable for a passive owner over the next period of the asset’s life”.

CBRE’s Scott Orchard and Tom Ryan brokered the sale.

Five months ago, FLCT offloaded the leasehold to a 1.8 hectare Port Melbourne industrial property, 2-46 Douglas St, for $42.5m – more than twice the then ($21m) book value.

Right location, building and tenant profile: agent

FLCT acquired 545 Blackburn Rd against a c$55m guide (story continues below).          

“We took an aggressive position with the asset from a price potential perspective, believing that the property matched other opportunities of this quality and price point in Melbourne’s city fringe market,” Mr Ryan said.

“The strong result sets a new [yield] benchmark for the suburban market for an existing multi-tenanted office investment,” he added.

“Despite the rising cost of debt there is still motivated capital that is aggressively pursuing quality investments with the right location, improvement and tenant profile story,” according to the executive.

The deal comes hot on the heels of the Grollo family offloading two major suburban offices – at Footscray (for $223.7m) and Dandenong ($165m).

Growthpoint, which acquired the latter asset, also recently spent $125m on the commercial component of a Hawthorn East complex which replaced a Bilia Volvo dealership.

Elsewhere in the east, TE Capital Partners nearly doubled its money divesting an investment in the Tally Ho business park, at Burwood East, for $35.8m after four years last November.

FLCT approaching $7b

Following the 545 Blackburn Rd deal, FLCT controls 101 industrial and commercial properties including in four other developed markets – Germany, the Netherlands, Singapore and United Kingdom.

Fund chief executive officer Robert Wallace said the Mount Waverley asset’s tenancy mix – with businesses in diverse industries – provides security for unitholders.

“The acquisition is aligned with our strategy to pursue…opportunities which provide attractive yields and enable us to leverage our management expertise in Australia,” he added.

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Marc Pallisco

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