Singaporean company Chip Eng Seng has paid around AUD$45.2 million for the landmark St Kilda Road property through its Australian subsidiary CES Properties (Australia), continuing the trend of major Melbourne commercial assets being snapped up by Singaporean groups.
The sale of the fully-tenanted 420 St Kilda Road in Melbourne (pictured), which represents the second largest transaction in St Kilda Road this year, follows other recent transactions by Singaporean-listed groups such as Aspial’s purchase of 383 King Street for AUD$41.5 million, Hotel Grand Central’s purchase of 300 Flinders Street for AUD$48.5 million, and Hiap Hoe’s purchase of three separate properties for a total of AUD$177 million including a carpark and office building at 380 Lonsdale Street for AUD$43.8 million.
According to Savills directors Clinton Baxter and Nick Peden, who negotiated the expression of interest sale of 420 St Kilda Road on behalf of a local private investment group at AUD$45,280,000 at an 8.1 percent yield, the property had attracted exceptionally strong interest from a broad range of local and offshore investors.
“The property offered very attractive investment credentials including a prime corner location, exceptional views and natural light throughout the building, strong tenancy profile, attractive yield, and views and future value-add opportunities.”
“We received numerous offers for the property from a wide range of local and off-shore purchasers,’’ Baxter said “with strongest bidding coming from Singapore, China and Malaysia.”
“The sale of this property is a further demonstration of the exceptionally strong off-shore buyer demand for high quality Melbourne investment assets, and shows that groups based in Asia will happily look beyond the CBD grid to secure assets of appropriate quality,’’ he added.
The modern 11-storey office building offers views across St Kilda Road, plus Albert Park, Port Phillip Bay and beyond, enjoys natural light throughout and a high standard of accommodation.
Peden said the 10,528 sqm (NLA) property was sold on a fully leased basis with income totalling AUD$3.6 million per annum net – equating to AUD$4,300 per sqm of NLA – with fixed rental growth built in to most leases.
The purchase by Chip Eng Seng is its fifth in Melbourne since first entering the market in 2010, and its first foray into the commercial investment market.
In a statement, the company said: “The purchase price for the property was arrived at after taking into account various commercial factors including the location of the property, the investment yield and the recent transacted prices for properties in the vicinity.”
Other acquisitions by Chip Eng Seng include 150 Queen Street (Tower Melbourne site), 33 MacKenzie Street in the CBD (33M development), a portion of Grocon’s CUB site in Carlton, and a large residential development site in Doncaster last month for AUD$19.28 million.
Andrew
Batt, International Group Editor of PropertyGuru Group, wrote this
story. To contact him about this or other stories email andrew@propertyguru.com.sg
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