St Kilda Road Office Tower Listed With $160 Million Price Tag

Strong fundamentals in Melbourne’s office market could see the Beville Group double its investment with the listing of its St Kilda road building.

The office tower, owned by developer and investor John Beville, is expected to sell in excess of $160 million.

Sydney-based fund manager Calibre Capital divested the St Kilda Road tower for $84 million in 2014.

Developers and land bankers are expected to show interest in the property which sits across a 6000sq m site.

The seven-level office building offers 19,500sq m of net lettable area and is fully leased to major tenants including the Australian government and AIA insurance.

Fully leased, the tower’s estimated annual net income is more than $8 million.

Related: Sydney Office Vacancy Lowest in 10 Years

CBRE’s Kiran Pillai and Josh Rutman have been appointed to market the international Expressions of Interest campaign.

“It’s arguably an opportunity for the next cycle, but given the property’s prime location, outlook and strong holding income we’re expecting the campaign to generate strong interest from land bankers and developers who are comfortable warehousing properties,” Rutman said.

“Investors may not choose to develop this property, but there is such versatility here and some distinct opportunities for adding value and driving the income profile of the asset.”

The property, constructed by Lendlease in the 1990s, sits on a Fawkner Park-fronted double site.

Recent transactions in the area include Singaporean businessman Teo Tong Lim’s acquisition of 312 St Kilda Road for more than $75 million, and Singapore’s Rockworth Capital Partners snapping up 390 St Kilda Road for $98 million last year.

“St Kilda Road has benefitted from record low vacancies in the Melbourne CBD, with absorption and effective rent growth figures for the precinct among the strongest in the country,” Pillai said.

The expressions of interest campaign will close September 27.