Swinburne to offload Invicta House after a year

Swinburne paid the Lazarovits family $44m for Invicta House last year.

Swinburne University has listed a historic Melbourne CBD commercial building for which it paid $44 million last April – the last property trough.

Invicta House at 226-232 Flinders Lane was purchased to occupy, however with COVID-19 affecting the education and international travel sectors, will be liquidated.

The school picked up the asset just prior to the federal election – after which time the city’s commercial (and residential) real estate market rallied strongly, until March.

Many agents, pointing to low-yielding results, believe demand for certain prime property was not dented following the coronavirus being classified a pandemic.

Invicta House (marked) is a block from Flinders Street Station.

However, with the national unemployment rate now speculated to peak at 9.25 per cent in December and a recession expected to be called official three months before then – it is unknown if demand for investments and development sites will dip in the second half of this year.

Last week, RMIT listed via a sale and leaseback the office component of its Building 108, at 235-251 Bourke Street, with price expectations of about $120m.

Eight months ago, University of Melbourne paid the Australian Red Cross $46m for neighbouring offices with development upside in inner north Carlton, also with the intention of occupying (that college might be watching what becomes of a similar valued property at 701 Swanston St, which hit the market nearly three weeks ago).

Swinburne is expected to break-even at Invicta House.

Invicta House at 226-232 Flinders Lane

Colliers International’s Daniel Wolman, Matthew Stagg and Oliver Hay – which sold Swinburne Invicta House last year – are the marketing agents again (story continues below).

A block from Flinders St Station and Federation Square, the seven storey building contains 6472 square metres of gross building area – about 65 per cent of which is lettable.

Victoria Police until recently rented three levels as its Melbourne East police station; the balance is tenanted to Greenhouse Backpackers.

Swinburne acquired Invicta House from the Lazarovits family – the owner of the latter business – paying $2.8m in 1998.

On a 742 square metre Capital 2 zoned plot, there is sky-rise redevelopment potential.

Any incoming owner could also increase the existing asset’s revenue by re-configuring ground floor space into retail – the building being in a shopping hotspot between Swanston and Elizabeth streets.

When the property was last for public sale, the agents proposed various development schemes including renovating the hostel into offices, and a small extension into the airspace (artist’s impression, top).

When contacted about a speculated disposal last month, a Swinburne spokeswoman said “the university maintains a diversified asset portfolio and at any time, in line with its investment strategy, may consider the sale of assets”.

This is an update of a shorter story published on July 4, prior to Swinburne University confirming a sale and marketing agency.

Colliers International marketed Invicta House last year with proposed development schemes including a renovation and repositioning – with the activation of ground floor retail, creation upper level offices and small extension into the airspace.

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Marc Pallisco

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

Marc Pallisco