A CBD office/retail investment once owned by late prime minister Bob Hawke is for sale.
The 3.5 level asset at 233-239 Collins Street, on the south east corner of Manchester Lane, is expected to trade for about $70 million which would reflect a sub four per cent return.
The vendor picked it up in 1997 as part of a $15.5m deal which included a mid-rise office, Hothlyn House, which was shortly after subdivided and sold down as a residential complex, The Collins, with over 160 dwellings.
Mr Hawke and bookmaker Peter Bartholomew were those sellers; they purchased the properties three years earlier for $7.25m – at a staggering 48.3pc yield – from the Fink family’s Klippax.
For decades last century, The Age was headquartered at the address; its printing presses still remain in the basement, Colliers marketing agents Matt Stagg, Anthony Kirwan, Daniel Wolman, Oliver Hay, and Leon Ma added.
Retail, office investment with development upside
All up containing 2650 square metres, the investment includes several ground floor tenancies – one leased to the Bank of Melbourne beneath the apartments.
A neighbouring building, also fronting Manchester Lane, includes a basement once occupied by a cinema and, at street level, a flagship OPSM.
A mezzanine space and second storey office is leased to a variety of users including a pathology group.
Part of the airspace of this component could offer development upside.
The property is opposite the historic Kodak House, a mixed-use, multi-level asset held for years by The Hour Glass, which recently refurbished it.
Coincidentally that retailer has in the past 12 months snapped up two more Collins St investments (#139 and #181) for a combined c$103m (story continues below).
Metro Rail will boost traffic, value: agents
Mr Kirwan said pedestrian traffic in this pocket of the city is forecast to increase upon completion of the new Town Hall train station, part of the Metro Rail project due for completion in 2025, which will drive retail rent growth along Collins St and Manchester Ln.
“Approximately 40pc of rental income is generated by healthcare sector tenants including…dentist and medical clinic, that have continued trading throughout the pandemic,” Mr Stagg added.
“Combined with a prime Collins St location, the asset is anticipated to be highly sought after by domestic and international purchasers seeking a stable long-term investment with strong income and capital growth potential,” according to the agent.
String of sales
The 233-239 Collins St listing comes as another asset in the vicinity, the Nicholas Building – offered in June with c$80m price hopes – recently became under offer.
Earlier this month we reported Jackalope Hotel founder Louis Li paid Helen Sykes c$25m for a mixed use building, 175 Flinders Ln, the upper office floors of which are now expected to be repurposed as a guesthouse.
In April, Justin Hemmes’ Merivale acquired the historic Tomasetti House at 277-279 Flinders Lane, also with plans to occupy.
Elsewhere in Melbourne’s CBD, Bob Hawke once retained a Spring St apartment.
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