Fully leased Port Melbourne building expected to fetch $40 million plus
A fully leased office building in Port Melbourne is on the market with expectations of more than $40 million.
The four-level building at 187 Todd Road is home to five high-profile tenants, including Wesfarmers’ Workwear Group, Emirates Retail Leisure and George Weston Foods, returning about $2,687,020 per annum in net passing income.
The asset will be sold via an expressions of interest campaign closing October 11.
The marketing is being handled for on behalf of Terraplex by Colliers International’s Peter Bremner, Rob Joyes and Leigh Melbourne, along with Dawkins Occhiuto’s Andrew Dawkins, Walter Occhiuto and Chris Jones.
Bremner said they were expecting interest from local and offshore private investors, syndicates and institutions.
“The property has always attracted blue-chip tenants,” he said.
“The tenancy is currently headlined by Workwear Group, Emirates Retail Leisure and George Weston Foods, generating a diversified income stream with a varied expiry profile.”
“There are no imminent lease expiries and all leases are structured with fixed annual reviews, which contributes to a diversified 4.1-year WALE.”
Fairfax Media added that the building was initially built for Boeing Industries nearly 20 years ago, and previously occupied by Kraft Foods.
Dawkins said the Fishermans Bend location, opposite the state government’s recently purchased General Motors site, was a key selling point.
“Fishermans Bend is undeniably the next chapter in Melbourne’s employment, industry and population growth story,” he said.
Port Melbourne office rents are also more affordable compared with those in other markets, such as the city fringe, St Kilda Road, South Melbourne and the inner east
“The average office rent for 187 Todd Road is circa $250 per sqm per annum and, being located outside the city’s Congestion Levy zone, the property presents occupiers with a 35 to 40 per cent total occupancy cost saving when compared to the surrounding office markets,” said Joyes.
“With city-fringe vacancy sitting at about 2.09 per cent, and limited new supply in the pipeline for Port Melbourne, rental growth is expected to be strong into the future.”
The building has a net lettable area (NLA) of about 9,212.7 sqm, a 3.5-star NABERS rating and 344 undercover car spaces, plus 10 on-grade visitor parks.