HThree City Australia has purchased a Melbourne 12-storey office tower for $72 million, the Singaporean investment house’s first Australian acquisition.
The 446 Collins Street tower near the corner of Queens Street has a net leasable area of more than 5500sq m and was owned by a Vantage Property Investments client.
It was the first of what HThree has said will be many office transactions for the firm, which is looking to grow its Australian real estate portfolio.
HThree chief executive Kevin Kang said they were able to complete the transaction within 10 weeks despite the challenge of lockdowns and travel restrictions in both countries.
“Notwithstanding the increasing prevalence of work-from-home arrangements, we are strong believers in the office sector and even more so of the Melbourne office market,” Kang said.
“There will always be a need for companies to have a physical office space, although the form of the office environment as we know it now will evolve over time.”
The off-market deal was brokered by CBRE’s Kiran Pillai, Scott McGlone, Mark Coster and Stuart McCann.
Pillai said the sale highlighted ongoing buyer demand for Melbourne investment opportunities.
“The strength and speed of the deal speaks volumes in relation to the emphasis that international investors are placing on continued investment into Melbourne,” Pillai said.
“As other major markets in the region reopen and vaccination rates surge locally, we are seeing both international and local groups placing more and more focus on the office sector as the return to the office effort builds momentum.”
The Melbourne office market has faced some of the most challenging conditions in the country with vacancy rates at 10.4 per cent.
However, levels of occupancy differs greatly from suburb to suburb with East Melbourne around 4.5 per cent and the CBD expected to bounce back once international travel resumes.
The western core, where the 446 Collins Street office tower sits, was recently rejuvenated, and is anchored by the newly completed Collins Arch development and the W Melbourne hotel nearby.
