Prominent Melbourne office expecting $90m-plus
Hotel Grand Central, which acquired one of Melbourne’s highest profile offices from Victoria University in 2013, is selling.
The upper storey commercial component of 300 Flinders Street is expected to trade for more than $90 million reflecting a sub 5.75 per cent yield.
Covering levels nine-19, it contains 14,093 sqm.
Most of the floor plates are 1905 sqm and get light from four sides.
The location, opposite the western edge of Flinders Street Station, overlooks the Yarra River and Southbank.
VU still occupies; its lease expires next year.
The school sold the lower storeys of 300 Flinders St in 2013 – the same time as the office.
That component was flipped a year later and is now held by a China based investor.
300 Flinders Street
Colliers’ Matt Stagg, who is marketing 300 Flinders St with Daniel Wolman and Oliver Hay, said the precinct is rapidly developing.
The address is near the Town Hall Station, set to open in 2025, part of the $9 billion Metro Tunnel project.
“Lendlease has Over Station Development rights to construct approximately 20,000 sqm of mixed-use retail and commercial space,” the agent added.
“Flinders St Station is the busiest train station in the Melbourne CBD,” according to the executive. “When the Metro Tunnel is completed, this location opposite Flinders St Station will have the highest concentration of pedestrian foot traffic in the Melbourne CBD and potentially that of any capital in Australia”.
Six months ago Deka Immobilien paid Dexus $440m – 22pc over book value – for Riverside Plaza at 452 Flinders St – which like #300, was constructed in the mid-1990s (story continues below).
Another double-deal?
Following a campaign with parallels, last year, Futuro Capital backed by Baring Private Equity acquired the upper levels of a Bourke St Mall office from RMIT following a public campaign.
The buyers separately and off market (and again via Colliers) purchased the ground floor from the Chan family.
The total outlay was c$210m.
The land is longer-term expected to make way for several structures.
A similar deal could be struck at 300 Flinders St – according to sources, the investment would be worth more than $180m as a whole; the site spreads 2221 sqm.
Higher ed assets
Last month Swinburne University sold a seven level warehouse-converted-office at 226 Flinders Lane – the block east of 300 Flinders St.
In late 2018, VU divested a collection of Little Lonsdale St assets.
That buyer, ISPT, is now building a 32-level building – the City West campus – following a 30 year pre-committed by the college (this office is where the occupants of 300 Flinders St will move to).
Also three years ago the University of Melbourne paid Australian Red Cross $46m for adjoining low rise commercial complexes at Carlton, not far from the city’s northern tip.
Last week Charter Hall paid $80.15m for a Kensington, Sydney, office leased to the University of New South Wales.
That school developed the vertical campus in 2005, selling it with a easeback the year after, for $41m.
