Office in Melbourne’s party precinct to attract $60m

Melbourne’s King St might have a reputation as a night time party hub.

But an office complex on the corner of Bourke St and King St, Melbourne is attracting some very serious interest from cashed-up punters from as far as Singapore.

The 12-storey building at 601 Bourke St could soon notch a $60 million price, according to CBRE’s Josh Rutman.

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Investors and international developers have shown interest, with the supply of office buildings in Melbourne tight at the moment, according to Rutman.

“All the interest has been about $60 million, which is a fair uplift on what they paid for it a while ago.”

Another 12-storey building with CBRE at 454 Collins St, Melbourne, is currently attracting interest at between $35 million and $40 million, he adds.

While the building was solid and making a strong return from its leases, the site’s long-term future was almost certainly as a development opportunity — giving it an edge in the current market, according to Mr Rutman.

“There are a number of people looking at the future height advantage.

The building at 601 Bourke St has a number of major tenants.

“And there’s no doubt that in the future that site will be developed to something much more high density.”

A neighbouring site has been cleared for a 52-storey development, giving an indication of what the capital city zoned structure could achieve, he adds.

However, in the immediate future, investors are tipped to come up trumps, with scope to grow the already strong leasing returns.

“The location combined with the triple street frontage really makes a big difference,” Rutman says.

The building faces Bourke St, King St and Gallagher Place.

Currently it is home to tenants including Toshiba, Study Group and Pragmatic Training.

The west of Melbourne’s CBD has witnessed significant development in recent years, with luxury apartment towers and hotels gravitating to the area.

Expressions of interest for the building are due by April 26.

It is for sale through CBRE in conjunction with Savills Australia.

This article from the Herald Sun first appeared as “King St party precinct building has eyes of very serious buyers”.