Offshore Investor Wants $85m for Melbourne Office Block

Brokers say a 10-storey office block along Melbourne’s leafy St Kilda Road could fetch as much as $85 million in an expressions-of-interest campaign launched this week.

However, at that price the prime corner building with an all-glass facade at 420 St Kilda Road is likely to represent a loss for the private offshore investor.

The group is understood to have paid $98 million for the 100-per-cent freehold property with a net lettable area of 10,435sq m in April of 2019.

Cushman and Wakefield, which is brokering the campaign, said the building’s typical floor plates were 1028s square metres. The block offers parking for 132 vehicles.

A diverse tenancy mix currently occupies about 75 per cent of the building.

The 65m tower—the tallest in that area—has floor-to-ceiling windows. The ground-floor lobby and end-of-trip facilities were recently refurbished.

Cushman and Wakefield said the property, which sits at the junction of Toorak Road, allowed for long-term additional net-lettable area, or redevelopment.

“With an ideal profile for private investors and investment managers, coupled with the potential for increased NLA, this is a standout investment for those seeking prime opportunities in the market,” Cushman and Wakefiled’s Leigh Melbourne said.

“With rising construction costs due to inflation, economic rents have considerably increased, making 420 St Kilda Road a strategically sound investment with a built-in rent reversion and long-term income growth potential.”

The expressions-of-interest closes on December 7.

▲ Cushman and Wakefield says the building’s lobby was recently refurbished.