An office deal fit for a prince

A Brunei prince has sold Victoria University’s Flinders Lane building.

A high-flying Brunei prince has emerged as the latest global heavyweight to cash in on Melbourne’s property boom, nabbing a near 40% premium on an office tower in less than two years.

A company controlled by Prince Abdul Qawi of Brunei has netted $34.2 million offloading the Victoria University building on Flinders Lane to the well-known Poulakis family, of Harrolds department stores.

The prince, who is eighth-in-line to the throne of the tiny nation surrounded by Malaysia, is the controlling shareholder and chairman of Singapore-listed LKW Holdings, which is emerging as a formidable property investor throughout the region.

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The sale, which exchanged just before Christmas, is likely to be the last multi-million-dollar deal for the year and could represent the high water mark for Melbourne commercial property. The deal passed on a sharp yield under 4%, but agents are more staggered by the sweltering capital growth, driven by a swag of private, high net worth buyers clamouring for properties priced below $50 million.

LKW paid $23.6 million for the seven-level tower less than 24 months ago and has made no improvements in the time it owned the building.

“You don’t often see deals like this,” CBRE director Josh Rutman tells The Australian, of the deal brokered along with Mark Wizel, Kiran Pilai and Paul Tzamalis. “To have literally 12 parties that missed out on securing the property is staggering.”

The building forms part of Victoria University’s City Technology campus and comprises 5690sqm of lettable space within walking distance of Flinders Station.

You don’t often see deals like this

It’s a high-profile purchase for the Poulakis family, who have forged a name through their successful chain of Harrolds department stores throughout Sydney and Melbourne and are now extending their property investment portfolio.

They partnered in July with BAM Venture Capital to purchase an office and retail building at 230 Toorak Rd with plans for a hotel.

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Last June, the family outbid another prominent Melbourne family, the Schiavello furniture family, to nab Melbourne’s last surviving flour mill for $4.2 million.

According to the agents, they were regarded as the frontrunner for the Flinders Lane tower from the beginning.

“The family called me virtually on the first day that the signboards were erected and said that this was something that they were very attracted to and would compete fiercely to acquire,” Paul Tzamalis says.

This article originally appeared on www.theaustralian.com.au/property.