Sydney-based EG Funds Management has listed a Melbourne CBD office building with the hope that strong commercial market conditions will help the B-grade tower sell for at least $80 million.
The 277 William Street tower was listed by real estate fund manager EG Funds Management, who chose to sell as part of a greater asset management and capital works strategy.
Major tenant global IT-based services group Civica recently committed to the building on a five-year term.
The fund manager paid $45.9 million in mid-2015 and has since completed refurbishments including a full upgrade to the ground level lobby and retail component.
EG Funds recently received the green light by the City of Gold Coast to build a twin tower high rise development that will feature 770 apartments and 400 hotel suites in the entertainment and nightclub heart of Surfers Paradise.
EG Funds acquired the central Gold Coast site from Cromwell Property Group in 2010 for $42 million.
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The William Street building measures 12,050 square metres and is located opposite to Flagstaff train station, and fully leased providing a 3.9 year weighted average lease expiry (WALE).
JLL’s Langton McHarg, who is helping to market the sale, said Melbourne’s office market is experiencing unprecedented purchaser demand.
“Investors are seeing considerable value from Melbourne’s booming population, limited future office supply, strong rental growth forecasts, and building value rates still half of that achieved in Sydney.
“There are limited purchasing opportunities available within 277 William Street’s price point, and as a result we are anticipating it will appeal high net worth privates, domestic and offshore institutional groups.”
The William Street office building is the sixth out of a total of seven assets to be sold from EG's Core Plus Fund.
EG divisional director Dan Farley told The Australian Financial Review that the final asset, a retail property in Brisbane, would be put up for sale in the second half of the year.