Offices trump apartments as Vic Police HQ sold again
The residential property market might be bouncing back strongly but office landlords are still buying up sites where luxury apartments had been planned, while the pre-sale market remains flat.
In one of the latest deals, in Melbourne, SC Capital has picked up a St Kilda Rd office block formerly occupied by the Victorian police force, ending hopes of building a luxury development designed by the late star architect Zaha Hadid.
The deal, flagged by The Australian last month, was sealed this week, and shows the values of commercial properties are still soaring, while residential sites can be hard to shift with the apartment market yet to really turn around despite bullish forecasts.
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The transaction saw Malaysian company UEM Sunrise sell 412 St Kilda Rd to Singapore-based SC Capital for $107.8 million.
UEM Sunrise had sold off close to 40% of the units in the striking development before putting the site up for sale in July.
SC Capital will pursue a revamp of the office tower, instead of building the proposed Hadid-designed 152-unit Mayfair apartments.
“This acquisition confirms our belief in the St Kilda Road office market,” SC Capital Partners chairman Suchad Chiaranussati says.
Artist’s impression of a planned interior in the Mayfair development.
“With vacancy at sub-6%, the lowest since July 2001, supported by limited supply and robust tenant demand, the property is very well positioned to deliver strong performance,” he says.
The property was sold off-market via Trent Hobart, John Marasco, Oliver Hay and Jozef Dickinson of Colliers.
SC Capital Partners has retained local investment manager, Artifex Property Group, which will undertake a major $40m refurbishment to capitalise on the location above the new Anzac Train Station to be delivered by 2025 via the $11bn metro rail project.
Artifex director Mark Frinsdorf says it would be the most significant office regeneration project the St Kilda Rd precinct had seen in the last two decades.
“We are once again excited to be working with SC Capital Partners to deliver St Kilda Road’s premier office asset,” he says.
The 19-level office building spans 16,285 square metres and has 174 car spaces. The building has views of the Shrine of Remembrance, Royal Botanic Gardens, the Melbourne CBD, Albert Park and Port Phillip Bay.
“The building has exceptional fundamentals and our planned refurbishment will provide future tenants with the highest quality accommodation and amenity in St Kilda Road,” Chiaranussati says.
This article originally appeared on www.theaustralian.com.au/property.
