Receivers put $100m St Kilda Rd towers on the market
Receivers KordaMentha will sell two major office towers on Melbourne’s leafy St Kilda Rd with hopes of reaping more than $100 million for the assets.
The towers, at 553 and 541 St Kilda Rd, are being offered by Langton McHarg, Robert Anderson and Alex McColl of JLL after their value was boosted by a series of recent leasing deals.
Both buildings back onto the Alfred Hospital and their owner, Singapore-listed International Healthway Corp, at one time held ambitions of launching a specialist medical property trust.
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However, Monash University’s medical faculty has taken a 10-year lease over the bulk of the space in the nine-level office complex at 553 St Kilda Rd.
It will join the US Consulate, which occupies two floors in the building that spans over 10,000sqm.
At 541 St Kilda Rd, online employment company Seek has extended its lease until October 2021, bolstering the tower’s income profile.
The ASX-listed company occupies the entire 8250sqm building and had been tipped to go to a Dexus development in the CBD.
The building also has longer-term repositioning potential.
The assets fell into the hands of the receiver after earlier efforts by International Healthway to sell them were thwarted by the actions of investment firm Crest Capital Asia.
The Singapore-listed company said last month it had been on track to sell the two office towers in Melbourne for more than $100 million.
But legal moves by Crest in the Victorian Supreme Court prompted local lenders to step in, the company claims. International Healthway owns three properties in Australia: the St Kilda Rd towers and a smaller complex in Geelong. The properties are mortgaged to Westpac and NAB, with mezzanine debt provided by finance house Qualitas on the Melbourne assets.
Westpac has a $44.3 million loan against the St Kilda Rd properties with Qualitas holding a $7.57 million exposure. NAB has a $16.25 million loan against the Geelong property.
International Healthway says the properties are together worth about $114.5 million, well in excess of the $68 million owed to lenders.
This article originally appeared on www.theaustralian.com.au/property.