Melbourne, 5 April 2016- A South Melbourne office building once bought for $5 million by the late Nathan Werdiger has transacted some 15 years later with a Mainland Chinese investor purchasing the property for $23.28 million.
11-17 Dorcas Street is situated between St Kilda Road and Wells Street and comprises a five level office of 3,885sqm. The property was sold with a lease in place to Dimension Data, a wholly owned subsidiary of Japanese Giant Telco company, Nippon Technologies.
The International Expressions of Interest Campaign was conducted by CBRE Melbourne agents Mark Wizel, Kiran Pillai and Josh Rutman.
“We were delighted with the response from the market for this property. At a time when the microscope is well and truly being applied to Melbourne Commercial Property, this result is further evidence in the disconnect between actual buyers on the ground and what many industry commentators are saying about the market place,” Mr Wizel said.
The property’s increase in value since its last trade in 2011 represents an $8 million capital gain in just 6 years. The medium term lease of 3.5 years and no option term resulted in strong interest from a range of buyers including owner occupiers, investors and developers.
“We understand that the buyer plans to settle the asset and then work out what the future for the property looks like,” Mr Wizel said.
“Without doubt we are seeing a major transitional shift from Chinese buyers at present looking to diversify away from raw land for high rise development, into a range of asset classes underwritten by solid cash flow and bankable covenants”, Mr Wizel added.
“I think what this campaign clearly shows the importance of on-market campaigns. The current conditions are favouring vendors who are bold and who engage agents to strategically market properties with a view to creating a competitive bidding environment,” CBRE Melbourne Middle Markets Director Kiran Pillai said.
The property was offered for sale with schematic drawings from Rothe Lowman yet industry experts indicate that it may be sometime before the site is developed given the quality of the cash flow and the solid nature of the improvements that sit on the site.
“If it was bought for pure development we would be very pleased as the land rate would be reflective of a price that is being achieved in Southbank and some parts of the Melbourne CBD,” Mr Rutman said.
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CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (in terms of 2015 revenue). The Company has more than 70,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 400 offices (excluding affiliates) worldwide. CBRE offers strategic advice and execution for property sales and leasing; corporate services; property, facilities and project management; mortgage banking; appraisal and valuation; development services; investment management; and research and consulting. Please visit our website at www.cbre.com.