Record low interest rates and a scarcity of inner city commercial properties with development potential are expected to drive strong interest in a prominent Richmond office building.
Colliers International’s Peter Bremner, Rob Joyes and Leigh Melbourne have been appointed to sell 180-188 Burnley Street in Richmond. The three-level commercial building is expected to generate interest in excess of $30 million.
“180-188 Burnley Street offers investors a secure long term cash flow from AAPT Limited, Australia's third largest land line telecommunications company owned by ASX-listed TPG Telecom Limited,” Mr Bremner said.
“The property also has significant underlying land value, as a rare inner city parcel of land with three street frontages and a total site area of just under 5,000sqm.
“With interest rates at record lows and a shortage of quality inner city commercial investment properties with obvious future development upside, this is sort of opportunity in this market does not often present itself.”
The three-level office building and data centre has a total net lettable area of 5,557.4sqm and includes a full sized basement, a ground floor mostly containing data centre space and associated plant and equipment and a first floor with bright, open plan office accommodation and staff amenities. The size is zoned Commercial 2.
“Development hot spots in the City of Yarra, including Richmond and Collingwood, are seeing record land prices being paid for development sites with Commercial 1, Commercial 2 or Mixed Use Zones,” Mr Bremner said.
“Land value rates in these suburbs mostly range between $4,000/sqm up to $10,000/sqm for development sites depending on their zoning, location and permissible height. As the supply of undeveloped significant sized parcels of land in the inner suburbs runs out due to the multitude of residential and mixed use projects, property values should continue to rise due to the sheer weight of demand."The property is fully leased to AAPT Limited until June 28, 2022, with a current net rent of approximately $2,262,791 per annum.
180-188 Burnley Street is located less than 40m from Melbourne's famous Bridge Road and lies 5.5km east of the Melbourne CBD.
The property is for sale by Expressions of Interest closing Friday September 25 at 2pm.