St Kilda Assets Attract Offshore Buyers

Melbourne developer Woodlink has offloaded its six-level, Illoura House, at 424-426 St Kilda Road for more than $70 million.

The property, which sits on a 4645sq m site with three street frontages, transacted with an approved permit for an 18 level mixed-use building – nearly three times the current height – with 163 apartments and 176 hotel rooms.

The developer initially had plans for a $360 million Bates Smart-designed residential development for the site.

Illoura House currently comprises a net lettable area of 12,659sq m over six levels along with basement parking for 144 cars.

CBRE's Mark Wizel, Lewis Tong and Josh Rutman brokered the deal, said the asset was snapped up by an offshore buyer with plans for the property to be refurbished and re-leased.

Tong said more than $1.2 billion has been transacted along Melbourne’s well-known St Kilda Road by offshore buyers in the past two-and-a-half years.

The most recent sale set a new benchmark for the precinct, which saw developer John Beville almost double his money in four years on the nine-level office tower at 509 St Kilda Road.

The transaction involved private Chinese investor Michael Xie who outlaid $163 million for the office tower on a fully leased yield of 4.96 per cent.

“This is just one recent sale which highlighted the very strong demand for St Kilda Road property particularly from Asian investors,” Tong said.

In April, Vantage Property Investments on-sold nearby asset 420 St Kilda Road to Mars Holdings for $95 million on a yield of 4.84 per cent. Marprop snapped up 541 St Kilda Road for $64 million from vendor Bayley Stuart on a 5.13 per cent yield in December last year.