Sources say 417 St Kilda Road, a 10-level office of around 20,500 square metres was quietly put to the market earlier this year with a price tag of more than $90 million. They say it was withdrawn when the price, which would equate to a high $4400 a square metre, spooked potential investors.
“I’d say a more realistic price is around $80 million, which would still equate to a yield of less than 7 per cent,” said one source. “But $90 million is a bit rich.”
Another source said the property is worth around $60 million.
Challenger only recently filled an 11,000 square metre hole left by petroleum giant Mobil after it vacated in 2003. The building occupies a double block near the corner of Toorak Road, and has views over Fawkner Park. The podium levels, measuring around 3300 square metres, are amongst the biggest floor plates in the precinct.
A representative from Challenger failed to return Capital Gain’s calls.
417 St Kilda Road is owned by Challenger Life No 2, managed by Challenger Financial Services. It bought the fully leased building off Leighton Properties for $73 million in June 2002.