Salta Properties’ Dulux House expected to trade for c$25 million

Salta Properties has listed an investment-grade suburban Melbourne office.

In Clayton, about 19 kilometres south-east of the CBD, Dulux House is expected to trade for about $25 million.

The offering is only the second metropolitan Melbourne office to be offered for public sale this year.

Purpose built for Dulux in 2007, the complex contains 6000 sqm of area and occupies a 7727 sqm block at the north-west corner of Princes Highway and McNaughton Road

The paint giant leases the entire thing.

Dulux also owns and occupies two adjoining properties for research and innovation activities.

Sam Tarascio Junior (front) with Salta Properties founder Sam Tarascio Senior.

The occupier is currently the subject of a takeover bid from Japanese giant Nippon Paint, Asia’s largest paint manufacturer, with the deal expected to be finalised in July.

To that end, Dulux might not be in a position to throw its hat in the ring for Clayton.

However, to be sure, CBRE’s Scott Orchard, Josh Rutman and Lewis Tong are closing an expressions of interest campaign on July 31.

The building at 1948-1962 Dandenong Road is near the IKEA-anchored Springvale Homemaker Centre and opposite the Schiavello family’s $1 billion M-City mixed-use development, which is set to contain apartments, a cinema, hotel and shopping centre.

“The property also benefits from its location in the Monash Employment and Innovation Cluster, which has Melbourne’s largest concentration of jobs outside the CBD,” the marketing agents said.

“The cluster supports approximately 75,000 jobs across a diverse range of industries and contributes over $9.4 billion to the Victorian economy each year”.

Other companies headquartered in the area include BMW Australia, Kmart, Canon and PPG.

“The Dulux House opportunity is a very exciting one for office investors as the property is well positioned to benefit from projected jobs growth, with employment numbers in the Monash Cluster potentially doubling over the next three decades” Mr Orchard said.

“This has continued to attract investment from some of the country’s largest A-REIT’s and private owners, as well as ongoing interest in new commercial and mixed-use developments.”

Salta Properties built Richmond’s Victoria Gardens mixed-use complex containing this shopping centre, and offices.

Mr Tong added that the Salta offering was strategic for Dulux’s purposes, but also provided potential future upside.

“Investors are telling us that they are looking for quality office assets that they can hold with confidence for the medium-long term, but also those that have flexibility and angles for adding value, and this building provides exactly that,” Mr Tong said.

“The asset in only 10 years old and offers a high-quality lease covenant that is set to become even stronger given the current Dulux takeover bid. It also offers incredible scope for multi-letting and reconfiguration in the future.”

Melbourne’s metropolitan market had become increasingly appealing for buyers, particularly international investors who had historically focused on the CBD or city-fringe, Mr Tong said.

“There has been close to $500 million of investment from Chinese and Hong Kong capital in Melbourne’s metropolitan office sector in the past year or so and we expect this property will be keenly sought,” Mr Rutman said.

Salta Properties was founded by Sam Tarascio Senior, but is now run by his son, Sam Junior. The company has diversified over the past 15 years from being a pure industrial developer, to an office, shopping centre and apartment builder.

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Marc Pallisco

A former property analyst and journalist, Marc is the publisher of realestatesource.com.au.

Marc Pallisco