Zagame Corporation pays $55 million for Hawthorn office to create battle-axe shaped super-site

Robert and Victor Zagame Junior – who run the hospitality empire established in 1971 by their late father, Victor Zagame Senior, have paid $55 million for a Hawthorn office.

The Swinburne University leased investment, 2 Luton Lane, adjoins other commercial properties Zagame Corporation owns in the pocket, including one it is speculated to be buying at 5-7 Guest Street (an asset we reported GormanKelly and Savills sold for $8.8 million last month).

Last March, the brothers paid $4.4 million for 3 Guest Street following another GormanKelly deal.

2 Luton Lane, Hawthorn, occupies a 4121 square metre site.

Both Guest Street properties abut 2 Luton Lane’s western boundary.

Zagame Corporation’s owner-occupied headquarters – a modern four-level 4400 sqm building at 290 Burwood Road, acquired for $24 million in 2014 – neighbours 3 Guest Street.

With its purchase of 2 Luton Lane, Zagame Corporation could control an 8189 square metre battle-axe shaped holding with three street frontages in one of Melbourne’s valuable suburbs.

Any redevelopment of the entire parcel would be some time away, however, with both 2 Luton Lane and 5-7 Guest Street sold with new five year leases in place.

Zagame Corporation is speculated to be paying $8.8 million for 5-7 Guest Street, which sold last month.

Zagame Corporation

The acquisition of 2 Luton Lane, Hawthorn, comes shortly after Zagame Corporation sold 509-513 Riversdale Road, Camberwell, for $4.65 million.

Last October it was reported that the family sold New York based investment bank Moelis a portfolio of five Victorian hotels for $271 million – however this deal did not proceed.

The family patriarch, Victor Zagame Senior established Zagame Corporation with the acquisition of Northcote’s Albion Charles Hotel.

Mr Zagame Senior died in October, 2017, with significant property investments including restaurants and hotels.

The family business is now directed by his two sons, Robert Anthony and Victor Junior.

2 Luton Lane

Coincidentally, 2 Luton Lane and 290 Burwood Road (Zagame Corporaton’s HQ) were until five years ago owned by Bennelong Group – which sold these two investments and another, 293 Camberwell Road, Camberwell, as part of a $100 million portfolio.

Sydney property syndicate Trumen and Brick Top were the vendors of 2 Luton Lane this time around – represented by CBRE Melbourne Middle Market’s Scott Orchard, Josh Rutman, Mark Wizel and Lewis Tong, with Gorman Commercial’s Stephen Gorman and Jonathan McCormack.

Zagame Corporation now controls 2 Luton Lane (outlined) and the three properties abutting it, facing Guest Street (front).

Trumen and Brick Top paid $37 million for 2 Luton Lane in 2015.

The 5660 sqm office was listed for sale last month with a newly signed lease to Swinburne University which occupies the space as its head administration office.

Former major occupiers include Skilled Group and Telstra.

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Marc Pallisco

A freelance property analyst and journalist, Marc is a co-founder of realestatesource.com.au.

Marc Pallisco
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