Frasers has snapped up a metropolitan office development in Melbourne, paying more than $60 million to acquire the property from its developers.

The five-storey, A-grade office building at 545 Blackburn Road, Mount Waverley has a total net lettable area of 7300 square metres. 

It is fully leased to nine tenants with a weighted average lease expiry of approximately five years.

In one of the first major metropolitan office buildings to be offered publicly in the Victorian capital this year, the international logistics and commercial manager paid $60.25 million to aquire the building from its developers, a small syndicate which included founding members of carsales.com. 

CBRE Capital Markets Office’s Scott Orchard and Tom Ryan negotiated the sale.

Orchard said the result, and underbidder interest, was “testament to the overall quality of the asset”, which is in Melbourne’s south-east, near Monash University.

“The strong result sets a new benchmark for the suburban market for an existing multi-tenanted office investment,” Orchard said.

“Despite the rising cost of debt, there is still motivated capital aggressively pursuing quality investments with the right location, improvement and tenant profile story.

Ryan said they had taken “an aggressive position with the asset from a price potential perspective, believing that the property matched other opportunities of this quality and price point in Melbourne’s city fringe market”.

This had generated broad local, interstate and international buyer interest, Ryan said, with Frasers Logistics and Commercial Trust securing the property after a competitive second round of offers.

▲ The five-storey, A-grade office building at 545 Blackburn Road, Mount Waverley.

Chief executive of the REIT Robert Wallace said the acquisition aligned with Frasers’ strategy to pursue strategic opportunities that provided attractive yields and enabled them to leverage their management expertise in Australia.

“With the property 100 per cent leased to reputable tenants in diverse industries, this acquisition is expected to further enhance FLCT’s quality tenant mix and portfolio metrics, while providing unit holders with a stable income stream,” he said.

Vendor syndicate chief executive Lee Mayberry said they had had a long-term hold intention for the property ‘which is why it was built to such a high-quality specification’.

“Our patience enabled us to put together an equally high-quality tenancy profile, with the building attracting occupiers mostly from the local area,” he said.

“However, a number of factors aligned making it more suitable for a passive owner over the next period of the asset’s life.”

After prolonged pandemic-induced lockdowns laid it low, Melbourne’s office sector has staged a remarkable recovery this year, with rent rises outpacing Sydney and Brisbane earlier this year.

Investment has followed the recovery— Growthpoint Properties in March paid $125 million for a Hawthorn East property while last month Fortis secured planning approval for its eight-storey South Melbourne office project with an estimated end value of $50 million.