Singaporean investment house HThree City Australia has acquired a key central Melbourne office tower, marking further expansion into the Australian office sector.
HThree teamed up with fellow Singaporean property giant City Developments to acquire the freehold 18-storey building from AMP Capital for $236 million.
It’s the second Melbourne purchase for HThree and only the fourth time the building—at 330 Collins Street— has changed hands in more than 60 years.
The 18,000sq m spread over 17 floors boasts 90 per cent occupancy by about 40 tenants. Cyber security services firm CyberCX is the biggest tenant with about 11 per cent of office space, while NAB—with a ground-floor exposure—has about 20 per cent.
HThree’s chief executive Kevin Kang said they were pleased to acquire such an iconic asset on a prime Collins Street corner.
“We believe that Melbourne’s CBD will continue to bounce back strongly, and that 330 Collins Street is well placed to benefit from the increasing demand for well-located, quality office space,” Kang said.
He said the transaction had been completed within nine weeks.
CDL Group chief executive Sherman Kwek said the expansion into the Australian office sector had complemented their focus on strengthening recurring income.
“On the back of strong economic fundamentals, Australia’s office market is poised for recovery,” he said.
It is the second Collins Street address for HThree, who in September last year paid $72 million for a 12-storey office tower at 446 Collins Street tower near the corner of Queens Street.
The deal was brokered by Cushman and Wakefield, whose international director of capital markets, Mark Hansen, said the buyers had brushed aside suggestions of a sluggish return by workers to Melbourne’s CBD.
“This comes right back to location. It is in the middle of Collins Street on the corner of Elizabeth Street, so it’s an absolutely cracking location that is always going to perform well and I think they will benefit from the continued flight to quality,” Hansen said.
“I would argue there is still a very high portion of tenants that want city offices and recognise the collaborations and benefits that come with working in a shared, centralised space.”
The purchase comes about a month after the Victorian Chamber of Commerce and Industry released a report saying nearly 70 per cent of central Melbourne businesses did not expect their employees to return full-time to the office.
However, Cushman and Wakefield’s director of its tenant advisory group, Marcus Tanti, told The Urban Developer last month, Melbourne businesses were demanding added quality as they tried to entice workers from homes and back into the CBD.
“The vacancies that have come up in the building, after refurbishments of some of the floors, have had great leasing success even through Covid,” Hansen said.
"I guess it backs up the point that tenants are willing to move to upgraded space and provide something in terms of amenities and style and quality, things that will help get the staff back into the office.”
