Melbourne’s Collins Street Tower Expected to Fetch $140m

A prominent Melbourne CBD office tower has come to market with a price guide of $140 million for the asset.

The property, 350 Collins Street, is being offered by Shakespeare Property Group via an expressions-of-interest campaign.

The 15-level office building in Melbourne’s financial precinct spans 17,400sq m metres of net lettable area on a 1900sq m dual-frontage site.

It is currently 90 per cent occupied and generates a passing net income of $7.9 million with upside to more than $9.1 million when fully leased.

The campaign is being run by Cushman & Wakefield agents Leigh Melbourne and Nick and is due to close on April 29.

The agents said the city’s office cycle was at a turn point, driven by stronger investor demand and expectations of rental growth.

Melbourne said buyer activity had lifted sharply, with more than 10 bids now commonly being received for well-located CBD assets as investors position ahead of a looming supply shortfall and continue to favour smaller suites under 500sq m, particularly along Collins Street and the Western Core.

Rathgeber said growing transaction volumes during the past 18 months had rebuilt confidence among offshore groups, with global capital increasingly targeting prime Collins Street opportunities following improved pricing transparency.

▲ A half-share in Southbank’s 2 Riverside Quay (at left) is also on the block.

Also in the Victorian capital, a 50 per cent stake in the 21-storey 2 Riverside Quay at Southbank has been brought to market.

The A-Grade building, completed in 2016, comprises 21,132sq m of office space across upper levels along with 567 car spaces, and is 82 per cent occupied with a weighted average lease expiry of 5.3 years.

Major tenants include PwC, which occupies a substantial portion of the tower under a long-term lease to 2034, as well as Fender Katsalidis and Wilson Parking, contributing to a fully leased net passing income of more than $18 million per annum.

The sale is being managed by Knight Frank agents Trent Preece and Tom Ryan together with Savills’ Kiran Pillai, Scott McGlone and Ben Schubert through an expressions of interest campaign due to end on April 30.

The agents said the property reflects strong demand for modern, ESG-compliant office assets, highlighting its 5.5 Star NABERS Energy rating, extensive tenant amenities, and panoramic Yarra River and CBD views as key drawcards for tenants and investors.

Pillai said Southbank remained one of Melbourne’s tightest office submarkets, supported by low vacancy, strong tenant retention and proximity to major infrastructure and lifestyle assets including Flinders Street Station, Crown Casino and the Melbourne Arts Precinct.

The campaign comes amid more than $2 billion in surrounding investment across Southbank, with major projects expected to further enhance the precinct’s appeal and underpin long-term office demand.