CFMEU sells Melbourne HQ for student accommodation

The CFMEU has sold its Melbourne office building at 500 Swanston St.
The CFMEU has sold its Melbourne office building at 500 Swanston St.

The CFMEU has sold its Melbourne headquarters to South African student accommodation developer Redefine Properties for about $27 million.

The union is moving to another office building on Elizabeth Street on the edge of the CBD, home to the Australian Nursing and Midwifery Federation, that it bought late last year for $30 million. The CFMEU declined to comment.

Agents on the latest sale were Sutherland Farrelly’s Paul Farrelly and CBRE’s Melbourne Middle Markets team of Mark Wizel, Kiran Pillai and Josh Rutman, who all declined to comment.

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The South Africa-listed Redefine, which has a market capitalisation of about $6 billion, has been active in the suburb, which borders the CBD and is close by both the University of Melbourne and RMIT.

Redefine last year spent $30 million on a carpark at 16-32 Leicester St and plans a $130 million, 700-bed high-rise tower. The group has flagged it will team up with Cromwell Property Group for a specialist fund.

Other student accommodation providers active in the area include Scape, Urbanest, Hengyi, Piccolo and GSA.

The CFMEU’s 1388sqm site at 500 Swanston St in Carlton houses a three-level office building and has 34 car parking bays and triple street frontage.

The CBD edge site was originally tipped to sell for $20 million — its sale price of about $19,000 per square metre was a record for that section of the street — and drew interest from a number of student accommodation developers and potential owner occupiers, it is understood.

The sale comes as investor demand grows for CBD fringe offices. Average capital values for Melbourne city fringe offices rose by 37% over the year to June 2016 as average vacancy rates fell during calendar 2016, according to CBRE figures.

Another test of the market is coming up: 478 and 480-488 ­Elizabeth St are for sale with expectations north of $30 million.

The two buildings have planning approval for a mixed-use hotel, residential and retail development and could attract some of the bidders who missed out on the CFMEU site.

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