A premium St Kilda Road office building is set to hit the market amidst strong demand for assets in the tightly held precinct.
Colliers International’s Leigh Melbourne, Nick Rathgeber and Peter Bremner have been appointed to sell 324 St Kilda Road on behalf of Perth-based syndicate Lester Group, who purchased the building in 2013.
“324 St Kilda Road occupies a high profile location at the sought-after northern end of St Kilda Road and is arguably one of the best located office buildings within the precinct, being one of very few buildings within walking distance of the CBD,” Mr Melbourne said.
“Already home to a diverse array of tenants, St Kilda Road continues to remain a favoured destination for businesses attracted to the unique combination of accessibility, amenity and affordability not offered by any other major office market in Victoria.”
The nine-level property offers a total of 7,101sqm of quality office accommodation and ample basement parking for 70 vehicles.
The 1,163sqm mixed use zoned site has rear laneway access and is close to the corner of Dorcas Street. The building offers 916sqm floorplates and has a projected fully leased net income of about $2.3 million per annum (at October 2015).
Following a major refurbishment in 2012, 324 St Kilda Road offers modern office accommodation with extensive car parking, end of trip facilities, natural light and views over the Royal Botanic Gardens and Shrine of Remembrance.
Mr Bremner said the vacancy rate on St Kilda Road had dropped more than one percentage point between July 2014 and January 2015. It currently sits at 9.8 percent.
“There is no new forecast supply in Melbourne’s second largest office precinct and with a high number of office buildings within the precinct earmarked for conversion to residential use, we are likely to see a further decline in the vacancy rate and ultimately drive net effective rents to rise,” he said.
“Average net face rents have steadily increased over the past two years. As at June 2015, prime net face rents on St Kilda Road averaged $340/sqm, increasing by more than 6.3 per cent over the last 12 months.
“Investor sentiment continues to gain momentum within the precinct as St Kilda Road is a sub-market of national and international significance. In 2014, all buyers on St Kilda Road hailed from interstate or overseas.”