Highly active investment and development company CostaFox has acquired Melbourne’s iconic Tea House building at Southbank for $28 million.
CBRE’s Melbourne Middle Markets team negotiated the off-market sale on behalf of a Melbourne-based investor who had owned the 28 Clarendon Street building for just over 10 years.
Built in 1888 and known as the “Robur Tea Building”, the heritage listed property is one of the most prominent examples of a 19th century warehouse in Melbourne.
Located adjacent to Crown Casino and the Melbourne Convention Centre, on the southern side of the Yarra River, the building was designed by Nahum Barnet and built by James Moore and John Grainger for printers and manufacturing stationers, Fergusson & Mitchell.
For many years the former factory and warehouse was one of the tallest buildings outside the CBD, with its height and character establishing it as a South Melbourne landmark.
The building, which has been largely vacant for several years, has a net lettable area of 3,250sqm and occupies a large site of 2,948sqm.
Michael Fox, Managing Director of CostaFox, said; “We are elated with this acquisition. To buy a site like this in this location with such a beautiful heritage building is difficult at the best of times. We plan to restore the building to its former glory.”
No stranger to restoring older buildings in Melbourne, Mr Fox won the Australian Property Institute Heritage Property Award in 2014 for his redevelopment of the old Tip Top Bakery site in East Brunswick.
CostaFox Development Director Geno Hubay noted; “We have commenced a worldwide search to find the best architects to help us bring Melbourne’s Tea House building back to life.”
CBRE’s Lewis Tong, who negotiated the sale alongside colleagues Mark Wizel, Josh Rutman and Scott Orchard, said the property had attracted interest from several parties, in an indicator of the positive investor sentiment in Melbourne’s sub $100 million office sector.
“Being Melbourne’s first major office transaction for 2020, the metrics of this sale provide a sound reflection of ongoing buyer confidence in the Melbourne office market,” Mr Tong said.
Mr Rutman added; “Several strong transactions occurred in Melbourne in the latter part of 2019 and there is a clear appetite for office investments, as evidenced by the interest we’re receiving on current sale campaigns.”
“Melbourne CBD and city fringe office buildings with attractive fundamentals are well positioned to achieve strong pricing outcomes due to the strength of tenant demand and subsequent rental growth prospects,” Mr Rutman added.
Eu Ming Lim of Thomson Geer acted as the vendor’s legal representative on the Clarendon Street sale.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBRE), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2019 revenue). The company has more than 100,000 employees (excluding affiliates) and serves real estate investors and occupiers through more than 530 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.
