Malaysian family spend $14 million on Dorcas Street, South Melbourne development prospect
A Malaysian family has snapped up an inner-city Melbourne commercial property with redevelopment potential.
The five-level building at 11 Dorcas Street, South Melbourne, fetched $14 million.
The building, which is fully leased to IT group Dimension Data, sold through CBRE agents Mark Wizel and Justin Clarkson at an 8.1% yield on the current passing income.
Clarkson says the sale highlighted continued demand for commercial investment property in Victoria.
“We are seeing strong levels of demand for well-leased and well-located passive investment grade assets in Victoria in the current market, with many groups shying away from assets that have significant vacancy risk or exposure to downward rental pressure,” Clarkson says.
However, Wizel adds the property’s medium-term potential for residential or mixed-use development was attractive for the private Malaysian family, who are securing their first Australian commercial property.
Inner-city Melbourne acquistions from buyers from Malaysia, Singapore and China has topped an estimated $680 million over the past 2 ½ years, Wizel says.
“Demand has remained strong even with the Australian dollar reaching $1.05 in recent times,” Wizel says
“The strong level of interest from Asian purchasers is due to the natural geographic links between Australia and key Asian countries as well as the affinity that many Asian investors have with Australia.”
Earlier this month, Richard Gu and his AXF Group, a subsidiary of the Shanghai family’s development firm, acquired Total House in Melbourne’s Chinatown for $40 million.
It is expected Gu will undertake a major CBD project at Total House, a retail, car park and office complex.
It has a 409-bay car park, eight retail tenancies and 4,000 square metres of office space.
CBRE agents Mark Wizel and Josh Rutman acted for Gu.
The property was sold by private investors MEK Nominees through Michael Gross of Gross Waddell.
Other sales have included SP Setia Australia’s $30 million purchase of 151-165 Franklin Street, the Fulton Lane residential towers development site, near the Queen Victoria Market.
The open-air 4,340-square-metre car park site, with two street frontages of Franklin and A'Beckett streets, was bought by Malaysia's largest property development company, SP Setia, from businessman Solomon Lew for just over $30 million.
CEL Australia paid $25 million for of 150 Queen Street. Its Singaporean developer Chip Eng Seng proposes a landmark apartment tower that would include 555 apartments that would replace a rundown office building with a 66-level residential tower.
Hengyi Australia bought 199 William Street in early 2011. The purchase of the Australian National Telecommunications Building located in Melbourne’s CBD marked the beginning of Shandong HYI (Group) Co. Ltd’s overseas investment.
Its now marketing the residential apartments through CBRE as The William, designed by Bruce Henderson Architects. Hengyi Australia is part of an international company behind China's $1 billion Weifang City shopping centre.
