A local syndicate has secured a South Melbourne office building for $14 million despite dampened appetite across the commercial property sector.
The partially-leased asset at 71-73 Palmerston Crescent, known as the Palmerston Crescent building, offers 4,528sq m across five levels including 40 basement and ground-level car parks.
The deal, brokered by Colliers International’s Daniel Wolman, Matt Stagg and Oliver Hay, also includes the ground floor café, which services office tenants and surrounding office and residential buildings.
The building is close to the Albert Park Lake, Royal Botanic Gardens and busy St Kilda Road, where a new Melbourne metro train station, to be known as Anzac Station, is being constructed.
“The immediate area is also set to benefit from construction of the new Anzac Train Station located at Albert Road and Domain Road intersection,” Wolman said.
“According to the state government, the new Anzac Station is expected to provide access to approximately 33,000 jobs and service 17,000 residents living within an 800-metre radius of the location by 2031.”
The popular fringe suburb has seen a run of deals during recent months as investors look to redeploy capital.
Nearby, architects Will Leaf and Toby Ewert, along with Ed Farquharson, owner of the property development firm Moda, cashed in on an office building at 49-51 Stead Street, selling the asset for $10.2 million after purchasing the property a year earlier for $6 million.
Local investor Brendan Sullivan also offloaded the Royal Australian and New Zealand College of Obstetricians and Gynaecologists building at 1 Bowen Crescent for more than $19 million after picking up the property for $18 million last November.
Late last year, Singapore-based SC Capital secured the former Victorian Police headquarters at 412 St Kilda Road for about $108 million from Malaysian developer UEM Sunrise after an apartment project failed.
In December, Vantage Property Investments also acquired a 10-level tower at 574 St Kilda Road on behalf of a pooled investment fund for $58 million, from the Lederman family’s SHL Nominees.
In Clayton South, 20km south-east of Melbourne’s CBD, a prime industrial sale and leaseback opportunity has also hit the market, with pricing expected to exceed $12 million.
Alysia Reilly, Jonathan Mercuri and Sean Thomson of Colliers International are marketing the 7,200sq m building at 110 Fairbank Road which includes a seven-year leaseback to national recycling company MPM Marketing Services.
Colliers’ director of capital markets Alysia Reilly said the logistics sector had continued to show its worth during the pandemic with defensive assets providing long lease terms and secure income in core industrial precincts remaining sought after.
“With the weight of capital coming into the logistics sector, it is a great time for companies to implement this strategy and a structure which protects their long-term interest in the real estate as an occupier without it impacting their balance sheet.”