Union digs deep for city fringe office
EXCLUSIVE
The Australian Education Union of Victoria has snapped up a prominent city fringe office to occupy.
The South Melbourne building – 17-33 Market Street – is costing $20 million.
Two thirds occupied, the result reflects a 4.1 per cent net passing yield.
Based on the potential fully let income, the return is 6.7 per cent.
The AEU is presently in an Abbotsford office on Trenerry Crescent, abutting the Eastern Freeway and Dights Falls.
The Market St deal comes four years since the Royal Australian and New Zealand College of Obstetricians and Gynaecologists outlaid $19.6m for a 1 Bowen St, South Melbourne – Lindsay Fox’s ex-HQ – also with plans to part-occupy. That group also migrated from the east – 254-260 Albert St, East Melbourne (story continues below).
Development upside
It is expected the AEU will retain part of the South Melbourne office, on the south east corner of Clarke St, as an investment; a strategy it also adopts at Abbotsford.
Verra Mobility Corporation, a $3 billion NASDAQ listed company, and Yamaha Music Australia are key tenants; the building contains 3065 sqm over three floors, and 29 basement car parks.
The site, spreading 1146 sqm zoned Commercial 2, has development upside – up to nine levels, according to Lemon Baxter marketing agents, Bill Makris and Paul O’Sullivan.
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