Pace Development Group is banking $31.6 million from the sale of a compact office investment it is completing the construction of, in Melbourne’s inner north east Collingwood.
The 11-level, 3082 square metre building at 51 Langridge Street found favour with a private investor in his 70s who grew up in the area and has just sold a business.
It occupies a 510 sqm plot at the south east corner of Wellington Street.
Adjacent to 51 Langridge Street, Pace is developing an apartment complex on the ex-Smith Family headquarters.
Last month we reported that adjoining warehouses at 8-10 Gipps Street, Collingwood, sold four days after the launch of an expressions of interest campaign.
Covering a 417 sqm site, the tenanted properties traded for a price speculated to be close to $8 million.
The incoming owner, a developer, plans to refurbish the space as an 895 sqm boutique office.
CBRE’s Scott Orchard, Josh Rutman, Mark Wizel and Lewis Tong listed 51 Langridge Street in late September.
Collingwood’s latest office: 51 Langridge Street
Pace expects to complete construction of 51 Langridge Street by Christmas.
Eleven occupants have pre-committed to about half of the building.
Pace offered the investment with a five year rent guarantee.
On a fully let basis, the asset is expected to generate net annual income of $1.6 million. Based on the sale price therefore, 51 Langridge Street is trading on a 5.1 per cent market yield.
The SJB Architects designed complex includes ground floor retail, end of trip facilities, basement car parking and communal areas. It is targeted to achieve a 5-star NABERS energy rating.
The site is about a kilometre from the CBD.
Pace DG’s recent spending spree
Pace founder and managing director Shane Wilkinson featured in the residential property news pages last month following his $4.5 million acquisition of a 7534 square metre Sorrento block where he plans to build a holiday home compound for his family.
Offered by Australian Financial Group executive director Malcolm Watkins and his partner, Peter Kerr, this site was sold by Peninsula Sotheby’s Rob Curtain.
In September, Pace paid $4.1 million for a Hawthorn East warehouse on a 478 sqm plot, permit-ready for a nine-storey, 34-unit residential building.
Pace will instead build an office on this site, 9 Montrose Street.
Mr Strode has also developed in Collingwood, a few years ago adding a 17-level apartment building on the historic Yorkshire Brewery site.
Elsewhere in Collingwood this year
Construction of a hotel recently started on the former Travellers suit factory site at 79 Wellington Street, almost adjacent to 51 Langridge Street.
A Veriu inn is earmarked for the suburb, too – within part of Tim Gurner’s 23-33 Johnston Street apartment complex.
Tribe Hotel Group is planning a flagship facility at 60-62 Langridge Street, not far from the office Pace has just sold.
Tribe bought this site from Peregrine Projects which is proposing a major mixed use complex, next door (64-88 Langridge Street).
The Liberman family’s Impact Investment Group is completing a 12-level office at the corner of Wellington and Northumberland streets, which upon completion, will be part leased to skincare giant Aesop.
US-based Hines is proposing a landmark timber office on a half-acre Wellington Street site it bought for $28.5 million in April, near 51 Langridge Street.