China-backed Poly Holdings has spent $45.85 million on a strategic property in Melbourne’s east.
The office park, on a 2.62 hectare block at 347-351 Burwood Highway, Forest Hill, includes two commercial buildings containing a net lettable area of 10,692 square metres and a multi-level car park.
The property is next door to a 5.68 hectare site at 353-383 Burwood Highway, on the north-west corner of Springvale Road, which Poly acquired from Hewlett Packard Enterprise for $88 million in January, 2018.
Adjoining residential streets, it is expected Poly’s amalgamated land holding will make way for medium and high-density housing in the longer-term.
The intersection of Burwood Highway and Springvale Road acts as the suburb border with Burwood East and Vermont South.
Fictional Ramsay Street, the subject of television show Neighbours, is in vicinity (its true address is Pin Oak Court, Vermont South).
Computer and electrical goods giant NEC is one of the office park tenants. But almost a third of the commercial space is vacant.
Based on the annual rent 347-351 Burwood Highway returns (approximately $3.4 million), it is selling on a passing yield of about 4 per cent.
The vendor recently spent about $12.75 million on capital works and refurbishments.
But it was the Commercial 1 zoning, which allows for the land to be replaced with housing, that was expected to pique the interest of residential developers. The weighted-average-lease expiry for the sitting office tenants is 3.4 years – ample time for Poly to propose and obtain a permit for a re-purpose.
Poly’s holding is opposite Tally Ho – considered Melbourne’s first master-planned suburban business park – containing some 15 low-rise investments around gardens and lakes.
Last year we reported two Tally Ho offices exchanged: the Myer and Baillieu families banked $25.5 million selling a three-storey office on a 1.7 hectare block at 12 Lakeside Drive; and Glorious Sun, another Chinese investor, outlaid $9.6 million for a CFA-leased office on 4900 sqm at 16 Lakeside Drive.
In 2017, Singapore’s Tong Eng Group controlled by Teo Tong Lim, spent $18.1 million on another Tally Ho office occupied by the CFA.