Bourke Street corner to set new tone for Melbournes Western Core
Bourke Street corner to set new tone for Melbourne's Western Core
| 9 April 2018
A 12-storey office building located on a prominent corner in the western pocket of Melbourne’s CBD is being offered for sale.
Located opposite AMP’s Bourke Place, at the busy King Street intersection, the 601 Bourke Street property is home to several well-known tenants including Toshiba, Study Group and Pragmatic Training.
The property, which is being offered with a 5.6-year WALE, features highly flexible floor plates that benefit from natural light from three sides given the efficient central side core design of the building.
Mr Pillai commented: “Given the significant investor appetite for Melbourne office assets and the building’s prime corner position, we expect the sale campaign to generate significant investor interest.”
“Very few CBD office transactions have occurred within this price bracket in the Western Core, and there is a clear appetite from investors who are looking to take full advantage of the strong office market fundamentals that Melbourne is showing.”
Mr Rutman said the long lease expiry profile would be a key buyer draw card, providing long term investment security.
“While the Melbourne market is showing some of the strongest fundamentals we have seen since 2007, the length of leases in this building provide an opportunity for investors to insulate themselves from any potential volatility in the market over the short to medium, and benefit from rental growth projections,” Mr Rutman said.
Mr Rutman also noted that while the building was being sold subject to a number of leases, the property's prime location, underlying fundamentals and long term, value-add potential future proofed the asset against any potential change in the occupancy profile.
“The property would suit a variety of long term options, including a strata sell-down or the development of additional floors, subject to the relevant planning approvals,” Mr Rutman said.
There is also genuine potential for additional levels to be constructed upon the existing building or a complete redevelopment into a much larger building in the future, subject to relevant planning approvals.”
The West End of the Melbourne CBD has undergone a transformation over the past decade, with some of the city’s largest corporates relocating to the precinct. A number of landlords have also upgraded their assets to provide more office accommodation and significant retail activation.
Major retailers and hoteliers have followed suit, the latest being the Mandarin Oriental which is set to be built at 600 Collins Street.
Other major developments in the precinct include Cbus Property’s Collins Arch mixed-use development, which has already attracted King & Wood Mallesons, HWL Ebsworth and Gadens as pre-committed tenants, as well as the city’s first W Hotel.
“Over $3 billion in office, retail and residential development is either planned or underway in Melbourne’s mid-town. It’s a rapidly changing landscape and investors are looking to get a piece of the action before this market fully matures,” Mr Pillai said.
601 Bourke Street is being offered for sale via an International Expressions of Interest campaign closing April 26, 2018.
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