Australian Unity’s office fund to pay distribution

Bayley Stuart will slot an office building on Melbourne’s St Kilda Road it has just bought into a new specialist fund.

Funds house Bayley Stuart will slot an office building on Melbourne’s St Kilda Road it has just bought into a new specialist fund.

The Melbourne based commercial property investment manager and investor, which runs more than $500m worth of funds, will put 468 St Kilda Road into its boutique multi-asset fund, Bayley Stuart – The Precincts Office Fund.

The manager has completed its counter-cyclical acquisition of the building, picking it up from the listed Australian Unity Office Fund for $42.55m.

The listed trust declared a special distribution of 24c per unit and is heading to wind up and delisting this year after earlier selling 2-10 Valentine Ave, Parramatta, and 150 Charlotte Street in Brisbane.

Bayley Stuart managing director Andrew MacGillivray noted the firm’s expertise in the St Kilda Road precinct, which included trading

606 St Kilda Road on the leafy boulevard to a Chinese investor for $57.5m.

“We are thrilled to return and secure a quality asset with high-calibre anchor tenants on compelling metrics. 468 St Kilda Road has consistently performed well due to its flexible floorplates that are ideal for SME’s, impressive views and prime location, now set to benefit from the evolving Anzac Train Station precinct. In the near term, we look forward to enhancing the arrival experience to further elevate occupier appeal,” he said.

He added that the property will become the second asset in Bayley Stuart – The Precincts Office Fund, a boutique multi-asset fund established two years ago to capitalise on market cycles.

“Our strategy remains focused on selectively acquiring quality assets at attractive valuations that will benefit from our hands on management approach,” he said.

Colliers’ John Marasco, Matt Stagg, Anna Cavar and Knight Frank’s Trent Preece, Tom Ryan brokered the transaction.

The St Kilda Road block comprises a 14 storey B grade office building with ground floor retail, basement carparking and a total net lettable area of 11,210sq m.

It sits on a prime 2,318sq m site in a commercial 1 zone and the property is just over two kilometres south of Melbourne’s CBD and 800 meters from the upcoming ANZAC Station, which is set to open next year.

The building is anchored by high quality tenants such as TLC Aged Care who lease two floors plus building naming rights. It is about three-quarters leased with a 2.5-year weighted average lease expiry.

Mr Stagg said the property received strong interest from multiple buyer groups including local and international investors, commercial owner-occupiers and residential developers.

It traded on a capital value of $3,795 per square metre of net lettable area, showing it was a counter-cyclical office play.

Mr Preece said 468 St Kilda Road was the largest office investment transaction to be completed in 2025 in Melbourne and the first genuine office investment sale along St Kilda Road in over three years.

“Buyer depth has significantly improved over recent months and St Kilda Road offers strong medium term growth potential with office withdrawals for residential development driving the vacancy rate down,” he said.