The Victorian government’s development arm, Development Victoria, has acquired Seven’s Melbourne headquarters in a deal worth $100 million.
The government splashed out on the building in May, buying it from insurance giant NRMA following a sales campaign initiated late last year by Colliers.
Development Victoria has had a busy few months, recently snapping up the Carlton & United Breweries building in Southbank for $95.5 million.
The sale does not affect Seven’s longstanding tenancy of the Melbourne Broadcast Centre.
Located adjacent to Etihad Stadium, which recently received $225 million to fund an upgrade, the building has a net lettable area of 8,200sq m and occupies a larger site area of 6,700 square metres.
Colliers International’s John Marasco said that the investment offers strong lease terms in a “premier office precinct”.
“Fully leased to Seven Network for its broadcasting operations as well as commercial office space, this five-level building offered purchasers an outstanding, highly specified building in a superb waterfront location,” he said.
Low vacancy rates and rising demand in Melbourne’s office markets has underpinned strong net absorption over the past year, according to BIS Oxford Economics recent market report.
The economic forecaster also said that office buildings outside of Melbourne’s CBD are “considerably undervalued”.
"We're looking at a prospective five-year internal rate of return (IRR) of around 10 per cent on average across Melbourne's non-CBD office markets," BIS report author Maria Lee said.
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Marasco said that Melbourne’s net absoption forecast has made it a sought-after destination for investment.
“Docklands itself has experienced 17 years of consecutive positive net absorption and currently has the lowest vacancy rate of any precinct in the Melbourne CBD office market at just 1.2 per cent.”
