Property Players Team Up in Counter-Cyclical Melbourne Office Deal

It’s the first deal for the counter-cyclical Shor Property + Development in Melbourne’s under-priced office market. 

A 12-storey office block, previously owned by Vantage Property Investments, sits on the 2326sq m site, which has dual street frontages and overlooks Albert Park Lake. 

According to a Shor Property + Development spokesman, the group intends to stabilise the asset and hold it as a medium- to long-term investment. 

It would also assess the asset’s potential for residential conversion in the longer term, a move that has characterised many of the buildings along the Queens Road strip. 

Neighbouring properties include a Home build-to-rent development and Orchard Piper, which is currently delivering a residential project on a site previously zoned for commercial use. 

▲ Vantage Property acquired the 11 Queens Road office in 2014.

The Shor Property spokesman said the group believed the office-to-residential trend will, over time, compress the supply of fringe office assets, which it believed strengthened the case for the counter-cyclical acquisition. 

The group has indicated it is also on the hunt for further counter-cyclical opportunities, with capital waiting in the wings. 

The acquisition strategy focuses on buying assets at prices below peak-cycle levels and undertaking rezoning to unlock their highest and best use. 

Cushman & Wakefield’s Oliver Hay brokered the deal alongside Daniel Wolman and Leon Ma. 

Hay said buyer appetite for Melbourne office assets was strengthening, particularly among counter-cyclical players looking to capture upside. 

“The level of enquiry on this campaign reflected a growing cohort of sophisticated private investors looking to secure well-positioned office assets at a point in the cycle where they can see both immediate value and longer-term optionality,” Hay said. 

And there is a strong conviction in the evolution of the Queens Road precinct, Wolman said.