Melbourne, 25 July 2013-The prominent Melbourne CBD home of State Trustees has been sold to a private investor – the first time in more than 40 years the building has changed hands.
Located at 168 Exhibition Street, the 11-storey building has a net lettable area of approximately 6,298 square metres and includes basement car parking, as well as ground floor retail space.
Acting as sole agent on behalf of the State Trustees, CBRE’s Melbourne City Sales team conducted the Public Expressions of Interest campaign for the property, with it attracting significant interest from local, interstate, overseas investors and developers.
CBRE agents Mark Wizel and Josh Rutman, who negotiated the sale, said the interest garnered from the sales campaign was an encouraging sign for the Melbourne property market.
“The sale of this property is further evidence of the strong demand coming from buyers to secure sub $30m commercial and retail opportunities in the Melbourne CBD,” Mr Rutman said.
“While incentives in the office sector continue to rise, the significant lack of buying opportunities, combined with the record low cost of debt, are spurring investors and developers to compete to acquire such assets.”
The property, which comprises a total land area of 748 square metres and provides two street frontages at the corner of Mornane Place, is fully occupied by State Trustees.
State Trustees has committed to relocate to Grocon’s $350 million McNab Avenue development, which borders the Footscray railway station, at the expiry of the lease.
Commenting on the development, State Trustees Managing Director Tony Fitzgerald said the Footscray site provided an exciting opportunity for a new retail space and head office.
“As the demand for State Trustees’ services increases, the relocation of our head office to Footscray signals our commitment to the growing community, and particularly to Melbourne’s west,” Mr Fitzgerald said.
“State Trustees made the decision to relocate to support our core business strategy of serving our clients’ needs and follows the success of our recent office openings in Dandenong and Bendigo.”
Mr Wizel said the building also presented an exciting opportunity to reconfigure the ground floor retail area given the quality of food and beverage operators that surround the building.
The north eastern core of the CBD remains one of the city’s strongest performing precincts, with the vacancy rate in this area just 3.9% compared to 5.6% for the overall Melbourne CBD market.
Low vacancy rates in boutique East End Melbourne commercial office buildings were assisting in driving rental increases – particularly in the eastern core, Mr Rutman added.
”These strong underlying fundamentals, combined with the location in Melbourne’s tightly held East End, helped drive buyer interest in 168 Exhibition Street,” Mr Rutman said.
“The attributes of the property, coupled with the clear value and potential that the asset offered, was the drawcard in generating significant interest in the campaign, not only from local and interstate buyers but also off-shore, particularly from Asia,” 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 2012 revenue). The Company has approximately 37,000 employees (excluding affiliates), and serves real estate owners, investors and occupiers through more than 300 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 atwww.cbre.com.au.