A private investor has snapped up a three-level office building in the heart of Melbourne's legal precinct as the city's CBD commercial property market continues to boom.
The office building located on a 569sq m at 212 King Street sold for $21 million having last sold for $3.2 million in 2004 when it was bought by New World Property Group, jointly owned by Melbourne real estate agent Tony Tai and Forus Pty Ltd.
The 1,279sq m building is located on the eastern side of King Street, between Little Bourke Street and Lonsdale Street and sold fully leased with two ground floor retail tenancies and levels one and two occupied by separate education providers.
The building is within close proximity to public transport including Southern Cross Station, Flagstaff Station and tram routes along Bourke Street and Spencer Street.
The transaction is the latest in a string of high profile property sales in the CBD in the first half of 2019, including 140-146 King Street which was purchased by Meriton chief Harry Triguboff for $29 million.
“On the back of current favourable economic conditions, we are working with a high number of active buyers and under-bidders on other campaigns who are eager to secure commercial assets that come to the market,” Colliers International Melbourne city sales director Matt Stagg said.
“Particularly properties with rental upside and value-add opportunities within the Melbourne CBD grid.”
Melbourne is the tightest CBD office market in Australia with an office vacancy rate of 3.2 per cent, and is forecast to drop to 2.7 per cent over the next 12 months with minimal movement.
Rents in Melbourne’s CBD have been also been climbing at the fastest growth rate since 2001, rising 14 per cent in 12 months, to be up by 32 per cent in the past five years.
Office vacancy rates are projected to remain tight across the greater city at 6 per cent, until 2021 despite a dozen new buildings being completed, partly because much space has been pre-leased to cope with existing tenant demand.
Melbourne's next development cycle is set to commence this year, which will see a number of premium-grade office buildings being added to the development market.