Linfox, Salta miss out on $95m VACC headquarters

VACC House at 464 St Kilda Rd in Melbourne.

Abacus Property Group has confirmed its purchase of a $95 million office tower in Melbourne’s busy St Kilda Rd corridor, in conjunction with Singapore-­listed Wing Tai Holdings. 

The deal fits with ASX-listed Abacus’s strategy of buying city fringe assets, with the property group recently picking up other office blocks outside the Melbourne and Sydney CBDs.

Meanwhile, suburban office assets are also in demand, with Propertylink Group eyeing an $82m block in western Sydney’s Parramatta.

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Propertylink has entered a heads-of-agreement with Singapore-listed Raffles Education Corporation to do due diligence for 1-3 Fitzwilliam St, a six-storey building partly leased to REC’s Raffles College.

Abacus and Wing Tai will pay $95.38 million to the Victorian Automobile Chamber of Commerce for VACC House at 464 St Kilda Rd, striking the deal as tenants in common in equal shares.

464 St Kilda Rd Melbourne office

Linfox and Salta were also in the running for the property.

As earlier flagged by The Australian, Abacus edged out competition from private developer Salta Properties and billionaire Lindsay Fox’s Linfox, which owns nearby 493 St Kilda Rd.

Agents on the deal were JLL’s Langton McHarg, Leigh Melbourne, Paul Kempton and Nick Rathgeber, and Colliers International’s John Marasco, Peter Bremner and Trent Hobart. The vendor was represented by ­Michael Jackson of Corporate Real Estate Advisory.

“The unique scale of the property, combined with an unprecedented level of domestic and international investor interest in the St Kilda Rd market, resulted in strong competition throughout the campaign,” Mr Bremner said. The eight-level office building covers 13,827sqm of net lettable area and is fully leased with a weighted average lease expiry of 2.4 years.

It traded for the first time in 60 years and changed hands with a sale and leaseback arrangement of about 30% of the floor space to the VACC. Almost 300 car park spaces are included on-site and at the neighbouring Queens Rd rear car park. The deal is expected to settle by the end of May.

Wing Tai, through its investment vehicle, previously bought a seven-level car park in Flinders St in the Melbourne CBD for more than $31 million.

464 St Kilda Rd Melbourne

The eight-level office building covers 13,827sqm of net lettable area.

Abacus recently bought an ­office building leased to Computershare in Abbotsford on Melbourne’s city fringe for $93.5 million from Hengmao Group, and an ­office in inner Sydney’s Alexandria leased to five tenants for about $48.9 million from a private ­investor.

Abacus backed the St Kilda Rd building as a “strategic long-term investment in a well performing market”.

“The property has strong fundamentals, including location, ­excellent natural light, views, a good car parking ratio and high ceilings, making it attractive to ­future tenants,” the company says in a statement.

“The property will also be aided by the Metro Rail Project, which will bring a train service to St Kilda Road for the first time, and likely to drive higher rents and tenant demand.” The company said the move supported “our city fringe thematic”.

The rail project is set to be complete in 2026, when Domain station will be 900m from the ­office.

Abacus has hired former Federation Centres chief executive Steven Sewell as its chief investment officer and announced he will take on the top job of managing director from July.

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