Hong Kong giant buying another high profile Melbourne office
Dexus is believed to be shedding another modern office.
The speculated $260 million deal for Melbourne’s Flinders Gate, developed five years incorporating the c1889 Ball and Welch building, at 172-192 Flinders Street (pictured, top), neighbouring 189 Flinders Lane, and a 1071-lot parking station, is with PAG, or Pacific Alliance Group.
Book value in December was $265.5m assuming a 7.34 per cent yield.
It would be the Hong Kong based buyer’s second major local CBD office – coming 14 months since picking up the Optus building at 367 Collins St.
That deal, worth $340m, was with Mirvac.
As well as a real estate investment arm, PAG has a Credit & Markets division.
Dexus sheds another asset
Coincidentally, Dexus, Australia’s largest office landlord, sold PAG a Sydney CBD office – 44 Market St – in early 2023.
That price, $393.1m, was against a c$500m-plus valuation two years earlier.
Flinders Gate contains 20,100 sqm of A-grade space in two buildings – 12,100 sqm built five years ago and part leased to John Holland, which also built it, with the balance in the two fully renovated historic buildings (the Ball & Welch and 189 Flinders Ln).
The build cost was $115m.
Cox Architecture, serviced offices group Hub Australia and Time & Place, led by Tim Price, are other occupiers.
The Flinders Lane building contains lower level hospitality.
All up it is 96pc leased with a weighted average lease expiry of just over four years
The investment also includes a multi-level car park with 1071 bays.
Any deal comes three months since we reported Dexus sold the historic 425 Collins St, on the south east corner of Market, to Mantzis Group, for $40m.
Dexus, for the Wholesale Australia Property Fund, paid $39m in 2016.
Also this year the asset manager shed 33 Park Road, Milton, in Brisbane.
Mid last year meanwhile it sold neighbouring modern Newcastle offices to RF Corval.
Early last year Dexus offloaded a major Fishermans Bend industrial investment with long term commercial development upside, for $30.1m.
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