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 it bought 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 4501 square metres of gross lettable area.

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 741 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 print journalist, Marc is the publisher of realestatesource.com.au.