Valad’s 575 Bourke Street listing to test Melbourne CBD office market

Larry SchlesingerDecember 8, 2020

Property group Valad has listed its 16-level A-grade office building at 575 Bourke Street for sale.

The listing is expected to test the strength of the tightly held Melbourne CBD market, which has an office vacancy rate of 5.3%, according to CBRE.

Valad acquired the tower in 2005 for $50.87 million on a yield of 6.34%.

An expression-of-interest campaign closing May 31 will be conducted by James Kaufman and Robert Anderson of Jones Lang LaSalle in conjunction with Martin O’Sullivan and Mark Coster of CBRE.

The property comprises a 16-level quality office tower, with ground-level retail, 15 office floors and two-level basement car park.

Melbourne is such a tightly held market, particularly for well-leased A-grade assets such as 575 Bourke Street.  It will be a great test of the market, and interest is expected from both local and international investors,” says Anderson.

“The building occupies a premium CBD location surrounded by some of Melbourne’s most highly regarded commercial towers, the law courts and Southern Cross train station.  It benefits from significant base building refurbishment and large highly efficient floor plates,” he adds.

The office comprises a net lettable area of approximately 16,201 square metres and floor plates of 1,050 square metres.

The property at 575 Bourke Street is currently 89% leased, with long-term tenants including Logie Smith Lanyon, McKean & Park, EO Financial Services and Equity Trustees Limited, who occupy two floors in the building.

“A number of the current tenants have been occupiers in the building for multiple terms, a testament to the strength of the asset and its ability to attract and retain tenants. The multi tenanted nature and staggered lease expiry of the asset underpins the high quality cash flow,” says Mark Coster of CBRE.

The sale of the building follows Valad announcing in February last year that would exit its Australian funds management business and focus on direct property ownership.

 

 

 

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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