The property at 258 Queensberry Street includes a 4-level, 9500 square metre B-grade office building, tenanted by the university’s administration staff. Based on the $1.4 million annual rent Melbourne University was paying when the property was put to the market, the property sold on a low yield of 5.2 per cent.
A spokeswoman for the university confirmed it purchased the property, and said it plans to continue using it as offices, despite its redevelopment potential.
The school’s digital print centre and mailroom will also move to the building later this year, according to the spokeswoman.
The property was the centre of one of the largest civil cases in federal court history in 1995 when a court decided a $14.8 million sale by Hudson Conway to a syndicate of private investors five years earlier was illegal.
Ownership of the building reverted to Hudson Conway in 1995, but by that stage the building was worth much less. The developer later sold the building to a private investor in a deal said to be worth around $8 million. That investor has since more than tripled his return onselling it to the university.
The University of Melbourne is the second to purchase an office building in the city fringe. Earlier this year the Royal Melbourne Institute of Technology paid $7.25 million for the former Health Services Union buildings at 106 Victoria Street. RMIT also plans to retain its building for administration staff.