Dalgety House, Bourke Street, Close to Sale For $40 Million

Sources say the former Dalgety House building, at 461 Bourke Street, is the only property in a basket of major city investments on the market in advanced negotiations for sale.

The 19-level building is believed to be selling for about $40 million, or $2555 a square metre of lettable area.

Drapac is believed to be the mystery buyer. The Melbourne developer was unavailable for comment.

The price would be equal to a high yield of about 8.7%, based on the building’s net annual income of $3.47 million.

To put this in perspective, average yields for A-grade office buildings this time last year were selling on yields of about 6.25%.

This would have given 461 Bourke Street a 2007 price tag of about $55 million, or $3500 a square metre, sources say.

Colliers International is marketing 461 Bourke Street on behalf of the Macquarie Direct Property Management, but declined to comment on any part of the campaign.

In late June, Charter Hall paid $73.5 million for a halfshare of Marland House, at 570 Bourke Street, reflecting a yield of 7.1%.

News of a sale – any sale – is welcomed by agents, valuers, owners and vendors alike, who have had very few transactions to sustain market interest levels in the turbulent third quarter of this year.

Major central business district office buildings seeking new owners include 330 Collins Street, initially expected to fetch about $130 million and now speculated to be in early negotiations for sale, 40 Market Street ($50 million) and a half-share in 1 Spring Street ($90 million).

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Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.