Nissan’s future Melbourne home sells for $111m

An artist’s impression of the soon-to-be completed office building at 254 Wellington Rd in Mulgrave.

The Singapore-listed Ascendas real estate investment trust has snapped up an under-construction office building in the Monash Technology Precinct in Melbourne’s Mulgrave for $110.9 million.

The complex, being built at 254 Wellington Rd, is the first part of a $400 million business park and will be bought from a venture between fund manager ESR and Frasers Property.

Ascendas REIT executive director William Ta says the acquisition is the group’s fourth suburban office property in Australia.

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“We are very pleased with this acquisition as it is well-located in the Monash Technology Precinct in Melbourne, has 65 per cent of the space pre-committed for 10 years and is distribution per unit accretive,” he says.

CBRE’s Kiran Pillai, Neva Courts, Chris O’Brien and JLL’s Tony Iuliano, Joshua Tebb and Alex McColl brokered the deal.

The property will hit practical completion in 2020 and automotive company Nissan will commence a 10-year lease for 65.2% of the space. The lease has a built-in rent escalation of 3% per annum.

The vendor will continue to market the remaining space in the property and also provide a three-year rental guarantee for any remaining vacant space.

The net property income yield for the first year is about 5.7% once deal costs are taken into account. After the purchase Ascendas REIT will own 97 properties in Singapore, 36 properties in Australia and 38 properties in Britain.

The complex at 254 Wellington Rd is a new, state-of-the-art suburban office building comprising an eight-level corporate office, workshop, cafe, end-of-trip facilities and multi-level carparking for 911 vehicles.

The property has a net lettable area of 17,507sqm and sits on freehold land. It is expected to achieve 5 Star NABERS Energy Rating and 5 Star Green Star Design.

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