Hong Kong jeweller buys Collins St tower for $314m

Hong Kong investor Foo Hang Jewellery has bought 595 Collins St, Melbourne. Picture: Andy Brownbill

Melbourne is locking in its status as a global investment destination for property investors, with Hong Kong group Foo Hang Jewellery finalising a deal to buy a Collins St tower for $314 million, its first move into Australia.

The city is on the radar of international investors as more stock hits the market, allowing offshore groups that had been focused on Sydney to also buy in Melbourne. Local and international property groups are readying their bids for QIC Global Real Estate’s 80 Collins St development, expected to sell for about $1.8 billion, with initial expressions of interest due at the end of this month.

Singapore-backed Frasers Property Australia last month put a half-stake in the $750 million Freshwater Place on the block, with GPT’s wholesale office fund expected to pick up that interest.

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The Hong Kong group’s $314 million purchase of the office complex at 595 Collins St provides the market with a boost, as it was struck at a crisp initial yield of 4.46%. It showed an equivalent market yield of 5.43% and a rate per square metre of $9789.

Agents Leigh Melbourne, Nick Rathgeber and Paul Kempton of JLL and Neva Courts of CBRE brokered the deal.

The 17-storey building, completed in 1984, spans 31,778sqm, made up of two interconnected office towers, three ground-floor shops and 145 basement car spaces. In 2007, the building had a major refurbishment.

The Collins St building was sold by South Korea’s National Pension Service, represented by US firm PGIM Real Estate.

It had bought it in 2011, taking a 90% stake in 595 Collins St from Investa and a fund it ran, in a deal valuing the whole asset at about $130 million.

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